SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~September 3130, 2012

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period for , 2012

Commission File No. 001-34793

LONGWEI PETROLEUM

INVESTMENT HOLDING LIMITED

(Name of registrant as specified in its charter)

Colorado		84-1536518
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
No. 30 Guanghau Avenue, Wan Bailin District, Taiyuan City, Shanxi Province,China		030024
No. 30 Dajingyu Street, Wan Bailin District, Taiyuan City, Shanxi Province,China		030024
(Address of principal executive offices)		(Zip Code)

(727) 641-1357

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer xo Non-accelerated filer (Do not check if a smaller reporting company) o Smaller reporting company ox

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of ~~May~~November 1013, 2012, the registrant had ~~100~~101,~~766~~484,~~966~~269 shares of its common stock issued and outstanding.

Table of Contents

TABLE OF CONTENTS

		PAGE
PART I		PAGE
	PART I
ITEM 1.	Condensed Consolidated Financial Statements	F-1
	Condensed Consolidated Balance Sheets as of March 31, 2012 (Unaudited) and June 30, 2011	F-1
	Condensed Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and June 30, 2012	F-1
	Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income for the Nine Months Ended March 31, 2012 and March 31, 2011	F-2
	Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income for the Three Months Ended September 30, 2012 and September 30, 2011	F-2
	Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income for the Three Months Ended March 31, 2012 and March 31, 2011	F-3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2012 and September 30, 2011	F-3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2012 and March 31, 2011	F-4
	Notes to the Unaudited Condensed Consolidated Financial Statements	F-4
	Notes to the Unaudited Condensed Consolidated Financial Statements	F-5
ITEM 2.	Management’s Discussion and Analysis or Plan of Operation	3
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	1210
ITEM 4.	Controls and Procedures	1310
PART II	~~PART II~~
ITEM 1.	Legal Proceedings	1411
ITEM 1A.	Risk Factors	1411
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1411
ITEM 3.	Defaults Upon Senior Securities	1411
ITEM 4.	Mine Safety Disclosures	1411
ITEM 5.	Other Information	1412
ITEM 6	Exhibits	14
ITEM 6.	Exhibits	12
	SIGNATURES	1513

Table of Contents

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Longwei Petroleum Investment Holding Limited and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31, 2012		June 30, 2011
	September 30, 2012		June 30, 2012
Assets	(In Thousands)
Current Assets:
	(Unaudited)
Cash	$	614,~~889~~413	$	911,~~422~~578
Accounts Receivable, Net of Allowance for Doubtful Accounts of $0 as of March 31, 2012 and June 30, 2011		32,385		23,883
Accounts Receivable, Net of Allowance for Doubtful Accounts of $0 as of September 30, 2012 and June 30, 2012		30,775		33,935
Inventories		6148,~~302~~072		5152,~~489~~619
Advances to Suppliers		90109,~~188~~578		57109,~~756~~865
Total Current Assets		~~190~~202,~~764~~838		~~142~~207,~~550~~997
Deposit		87,046		85,093
Property, Plant and Equipment, Net		132,937		47,202
Property Plant and Equipment, Net		47,177		45,662
Land Use Rights, Net		24,262		-
Total Assets	$	324,987	$	273,305
Deposit Paid for Long-Term Assets		-		87,103
Liabilities and Stockholders' Equity
Total Assets	$	360,037	$	342,302
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts Payable	$	~~815~~926	$	~~589~~750
Warrant Derivative		~~2,291~~895		~~2,893~~320
Taxes Payable		57,~~858~~558		87,~~096~~687
Total Current Liabilities		89,~~964~~379		118,~~578~~757
Total Liabilities		89,~~964~~379		118,~~578~~757
Stockholders' Equity:
Stockholders’ Equity:
Preferred Stock, No Par Value, 100,000,000 Shares Authorized; 914,643 and 914,643 Issued and Outstanding as of March 31, 2012 and June 30, 2011		418		418
Preferred Stock, No Par Value; 100,000,000 Shares Authorized; 814,643 and 914,643 Issued and Outstanding as of September 30, 2012 and June 30, 2012		373		418
Common Stock, No Par Value; 500,000,000 Shares Authorized; 100,766,966 and 100,751,966 Issued and Outstanding as of March 31, 2012 and June 30, 2011		31,519		31,502
Common Stock, No Par Value; 500,000,000 Shares Authorized; 100,989,966 and 100,889,966 Issued and Outstanding as of September 30, 2012 and June 30, 2012		31,713		31,667
Additional Paid-in Capital		7,992		7,992
Retained Earnings		~~244~~279,~~545~~454		~~196~~261,~~641~~696
Other Comprehensive Income		31,~~549~~126		2531,~~174~~772
Total Stockholders’ Equity		~~316~~350,~~023~~658		~~261~~333,~~727~~545
Total Liabilities and Stockholders’ Equity	$	~~324~~360,~~987~~037	$	~~273~~342,~~305~~302

The accompanying notes to these consolidated financial statements are an integral part of these financial statements.

F-1

Table of Contents

Longwei Petroleum Investment Holding Limited and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income

	For the Nine Months Ended March 31,
	For the Three Months Ended September 30,
	2012			2011
	(In Thousands, Except Per Share Data)
Net Sales	$	~~374~~133,~~236~~385		$	~~353~~118,~~106~~631
Cost of Sales		~~307~~107,~~983~~954			~~283~~96,~~397~~614
Gross Profit		6625,~~253~~431			6922,~~709~~017
Operating Expenses		~~2,889~~918			~~4,097~~973
Operating Income		6324,~~364~~513			6521,~~612~~044
Derivative Income (Expense)		~~602~~(575	)		(72,~~948~~127	)
Interest Income		125			124
Interest Expense		-			-
Income Before Income Tax Expense		23,943			23,175
Income Before Income Tax Expense		63,978			57,676
Income Tax Expense		(6,170	)		(5,324	)
Income Tax Expense		(16,029	)		(16,809	)
Net Income		17,773			17,851
Net Income		47,949			40,867
Foreign Currency Translation Adjustment		(646	)		2,856
Foreign Currency Translation Adjustment		6,375			9,550
Comprehensive Income	$	17,127		$	20,707
Comprehensive Income	$	54,324		$	50,417
Net Income	$	17,773		$	17,851
Net Income	$	47,949		$	40,867
Preferred Stock Dividends Paid in Cash		(15	)		(15	)
Preferred Stock Dividends Paid in Cash		(45	)		(186	)
Net Income Attributable to Common Stockholders	$	17,758		$	17,836
Net Income Attributable to Common Stockholders	$	47,904		$	40,681
Earnings per Common Share:
Basic	$	0.4818		$	0.42018
Diluted	$	0.47		$	0.40
Diluted (September 30, 2011 – Restated)	$	0.17		$	0.15
Weighted Average Common Shares Outstanding:
Basic		100,~~762~~961			96100,~~931~~752
Diluted		101,~~764~~814			101,~~508~~701

The accompanying notes to consolidated financial statements are an integral part of these ~~financial~~ statements.

F-2

Table of Contents

Longwei Petroleum Investment Holding Limited and Subsidiaries

Unaudited Condensed Consolidated Statements of ~~Operations~~Cash ~~and Other Comprehensive Income~~Flows

	For the Three Months Ended March 31,
	For the Three Months Ended September 30,
	2012			2011
	(In Thousands, Except Per Share Data)
	(In Thousands)
Net Sales	$	129,221		$	119,574
Cash Flows From Operating Activities:
Cost of Sales		107,367			95,486
Net Income	$	17,773		$	17,851
Gross Profit		21,854			24,088
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Operating Expenses		913			1,081
Depreciation and Amortization		557			515
Operating Income		20,941			23,007
Stock Based Compensation		17			17
Derivative Income (Expense)		(733	)		9,221
Changes in Warrant Derivative Liability		575			(2,127	)
Interest Income		4			3
(Increases) Decreases in Assets:
Interest Expense		-			-
Accounts Receivable		3,095			(203	)
Income Before Income Tax Expense		20,212			32,231
Inventories		4,446			(13,935	)
Income Tax Expense		(5,286	)		(5,860	)
Advances to Suppliers		75			(6,149	)
Net Income		14,926			26,371
Increases (Decreases) in Liabilities:
Foreign Currency Translation Adjustment		1,874			3,272
Accounts Payable		(28	)		25
Comprehensive Income	$	16,800		$	29,643
Taxes Payable		74			(2,620	)
Net Income	$	14,926		$	26,371
Net Cash Provided By (Used in) Operating activities		26,584			(6,626	)
Preferred Stock Dividends Paid in Cash		(15	)		(25	)
Cash Flows From Investing Activities:
Net Income Attributable to Common Stockholders	$	14,911		$	26,346
Purchase and Improvements to Land and Fixed Assets		(23,710	)		-
Earnings per Common Share:
Net Cash Provided By (Used in) Investing Activities		(23,710	)		-
Basic	$	0.15		$	0.26
Cash Flows From Financing Activities:
Diluted	$	0.15		$	0.26
Payment of Dividends		(15	)		(15	)
Weighted Average Common Shares Outstanding:
Net Cash Provided By (Used in) Financing Activities		(15	)		(15	)
Basic		100,767			100,197
Effect of Exchange Rate Changes in Cash		(24	)		131
Diluted		101,796			102,137
(Decrease) Increase in Cash		2,835			(6,510	)
Cash, Beginning of Period		11,578			9,422
Cash, End of Period	$	14,413		$	2,912
Supplemental Cash Flow Information:
Cash Paid During the Year for:
Income Taxes	$	5,585		$	6,956
Supplemental Schedule of Noncash Investing and Financing Activities:
Conversion of Preferred Stock into Common Stock	$	-		$	-
Deposits-Long Term Assets for Fixed Assets	$	87,103		$	-

The accompanying notes to consolidated financial statements are an integral part of these financial statements.

F-3

Table of Contents

Longwei Petroleum Investment Holding Limited and Subsidiaries

Notes to the Unaudited Condensed Consolidated ~~Statements~~Financial ~~of Cash Flows~~Statements

	For the Nine Months Ended March 31,
	2012			2011
	(In Thousands)
Cash Flows From Operating Activities:
Net Income	$	47,949		$	40,867
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization		1,580			1,399
Stock Based Compensation		17			857
Changes in Warrant Derivative Liability		(602	)		7,948
(Increases) Decreases in Assets:
Accounts Receivable		(7,955	)		(915	)
Inventories		(8,631	)		(22,451	)
Advances to Suppliers		(31,106	)		28,007
Increases (Decreases) in Liabilities:
Accounts Payable		213			(189	)
Taxes Payable		(2,424	)		(2,258	)
Net Cash Provided By (Used in) Operating activities		(959	)		53,265
Cash Flows From Investing Activities:
Purchase and Improvements to Land and Buildings		(2,057	)		(1,960	)
Deposit made to Acquire Fixed Assets		-			(32,232	)
Net Cash Provided By (Used in) Investing Activities		(2,057	)		(34,192	)
Cash Flows From Financing Activities:
Payment of Dividends		(45	)		(186	)
Proceeds from the Exercise of Warrants		-			2,908
Net Cash Provided By (Used in) Financing Activities		(45	)		2,722
Effect of Exchange Rate Changes in Cash		528			443
(Decrease) Increase in Cash		(2,533	)		22,238
Cash, Beginning of Period		9,422			10,125
Cash, End of Period	$	6,889		$	32,363
Supplemental Cash Flow Information:
Cash Paid During the Year for:
Income Taxes	$	18,303		$	17,250
Supplemental Schedule of Noncash Investing and Financing Activities:
Conversion of Preferred Stock into Common Stock	$	-		$	2,572

The accompanying notes to consolidated financial statements are an integral part of these financial statements.

F-4

Longwei Petroleum Investment Holding Limited and Subsidiaries

Footnotes to the Unaudited Condensed Consolidated Financial Statements

NOTE 1 - NATURE OF BUSINESS

Longwei Petroleum Investment Holding Limited (the “Company”) is an energy company engaged in the wholesale distribution of finished petroleum products in the People’s Republic of China (the “PRC”). The Company’s oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. The Company purchases diesel, gasoline, fuel oil and solvents (the “Products”) from various petroleum refineries in the PRC. The Company’s headquarters are located in Taiyuan City, Shanxi Province (“Taiyuan”). The Company has a ~~total~~ storage capacity for its Products of ~~120~~220,000 metric tons located at ~~its~~three ~~fuel depot~~ storage facilities inwithin Shanxi: Taiyuan, Gujiao and ~~in Gujiao~~Huajie, ~~Shanxi~~which ~~(“Gujiao”),~~have ~~with~~an ~~50,000~~individual ~~metric~~storage ~~tons~~capacity ~~and~~of 70approximately 50,000 metric tons of(“mt”), ~~capacity~~70,000mt, ~~respectively at each location. The Gujiao facility was acquired in January of 2009~~ and ~~commenced~~100,000mt, ~~operations in November of 2009~~respectively. The Company is 1 of 3 licensed intermediaries in Taiyuan and the sole licensed intermediary in the regions around Gujiao and Huajie that operates its own large scale storage tanks. The Company has the necessary licenses to operate and sell Products not only in Shanxi but throughout the entire PRC. The Company seeks to earn profits by selling its Products at competitive prices with timely delivery to transportation companies, coal mining operations, power supply and industrial customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue from ~~under an~~ agency ~~fee~~ fees by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company’s facilities in Taiyuan and Gujiao. The sales price and the cost basis of the Company’s products are largely dependent on regulations and retail price control measures instituted and controlled by the PRC government, as well as the price of crude oil. The price of crude oil is subject to fluctuation due to a variety of factors, all of which are beyond the Company’s control.

The Company was incorporated under the laws of the State of Colorado on March 17, 2000 as Tabatha II, Inc. On October 12, 2007, the Company changed its name to Longwei Petroleum Investment Holding Limited.

Control by Principal Shareholders

The Company’s directors, executive officers and their affiliates or related parties, own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, the directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company's assets or business.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the consolidated financial statements.

In June 2009, the Financial Accounting Standards Board (“FASB”) established the Accounting Standards Codification ("Codification" or "ASC") as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). Rules and interpretive releases of the Securities and Exchange Commission ("SEC") issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented. All accounting references have been updated and therefore, FASB references have been replaced with ASC references.

Principles of Consolidation

The consolidated financial statements, prepared in accordance with GAAP, include the assets, liabilities, revenues, expenses and cash flows of the Company and all of its subsidiaries. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books and records of the Company’s subsidiaries to present them in conformity with GAAP. Many of our estimates and assumptions involved in the application of GAAP may have a material impact on reported financial condition, and operation performance and on the comparability of such reported information over different reporting periods. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial statements are presented in U.S. Dollars.

F-5

Subsidiaries	State and Countries Registered In	Percentage of Ownership
Longwei Petroleum Investment Holding Limited	British Virgin Islands		100.0	%
Taiyuan Yahua Energy Conversion Ltd.	People’s Republic of China		100.0	%
Shanxi Zhonghe Energy Conversion Ltd.	People’s Republic of China		100.0	%	(a)
Taiyuan Longwei Economy & Trading Ltd.	People’s Republic of China		100.0	%	(a)
Shanxi Heitan Zhingyou Petrochemical Co., Ltd	People’s Republic of China		100.0	%	(a)

(a) A total of 95% of the ownership units are held by the Company’s subsidiaries. The remaining 5% of the ownership units are held in trust for the benefit of the Company’s subsidiaries in accordance with local Chinese regulations, therefore no non-controlling interest is recognized. The 5% ownership units are held in trust by our Chairman and CEO, Mr. Cai Yongjun, for the benefit of Taiyuan Yahua Energy Conversion Ltd. and Shanxi Zhonghe Energy Conversion Ltd. The 5% ownership unit held in trust for the benefit of Taiyuan Longwei Economy & Trading Ltd. is held by an individual who is also an employee of the Company. This ownership structure is organized to comply with PRC and local business ownership requirements.

Management’s Representation of Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the SEC. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year. These condensed consolidated financial statements should be read in conjunction with the audited financial statements at June 30, ~~2011~~2012 as filed in the Company’s Form 10-K filed with the SEC on September 13, ~~2011~~2012.

Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We base these estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from management’s estimates. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

Foreign Currency Translation and Other Comprehensive Income

~~The~~Total ~~accounts~~comprehensive ofincome ~~the~~is ~~Company’s~~defined ~~PRC~~as ~~subsidiaries~~all ~~are~~changes ~~maintained~~ in ~~the~~stockholders’ ~~PRC~~equity ~~Renminbi~~during ~~(“RMB”)~~a ~~and~~period, ~~the~~other ~~accounts~~than ofthose ~~the~~resulting USfrom ~~parent~~investments ~~company~~by ~~are~~and ~~maintained~~distributions into ~~the~~stockholders ~~US Dollar~~ (~~“USD”)~~i. ~~The~~e. ~~accounts~~issuance of ~~the~~equity ~~PRC~~securities ~~subsidiaries~~and ~~were~~dividends). Generally, ~~translated~~for ~~into USD in accordance with~~ the ~~provisions of FASB ASC Topic 830~~Company, ~~“Foreign~~total ~~Currency~~comprehensive ~~Matters”,~~income ~~with~~equals ~~the~~net ~~RMB~~income asplus ~~the~~or ~~functional~~minus ~~currency~~adjustments for ~~the~~currency ~~PRC subsidiaries~~translation. ~~According~~ toThe ~~ASC~~gains ~~830, all assets~~ and ~~liabilities~~losses ~~were~~resulting ~~translated~~from at the ~~exchange~~translations ~~rate~~of onforeign ~~the~~currency ~~balance~~transactions ~~sheet date; stockholders’ equity is translated at historical rates;~~ and ~~statement~~balances ~~of income items~~ are ~~translated~~reflected atin the ~~weighted~~statements ~~average~~of ~~exchange rate for the period~~income. The ~~resulting~~total ~~translation adjustments are reported under other~~ comprehensive income inrepresents ~~accordance~~the ~~with~~activity ~~FASB~~for ~~ASC~~a ~~Topic~~period ~~220,~~net ~~“Comprehensive~~of ~~Income,”~~related ~~which~~tax ~~establishes~~and ~~standards~~was ~~for~~a ~~reporting~~loss ~~and~~of ~~displaying~~$645,500 ~~comprehensive income~~ and ~~its~~a ~~components~~gain inof a$2,855,524 ~~financial~~for ~~statement~~the ~~that~~three ismonth ~~displayed~~periods ~~with~~ended ~~the~~September ~~same~~30, ~~prominence~~2012 asand ~~other~~2011, ~~financial statements~~respectively.

Total comprehensive income is defined as all changes in stockholders’ equity during a period, other than those resulting from investments by and distributions to stockholders (i.e. issuance of equity securities and dividends). Generally, for the Company, total comprehensive income equals net income plus or minus adjustments for currency translation. The gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statements of income. The total comprehensive income represents the activity for a period net of related tax and was a gain of $1,873,527 and a gain of $3,272,004 for the three month periods ended March 31, 2012 and 2011, respectively. The total comprehensive income was a gain of $6,374,869 and a gain of $9,550,124 for the nine month periods ended March 31, 2012 and 2011, respectively.F-4

~~Accumulated~~Table ~~other comprehensive income related to the foreign currency translation in the consolidated statement~~ of shareholders’ equity amounted to $31,548,931 and $25,174,062 as of March 31, 2012 and June 30, 2011, respectively. The balance sheet amounts with the exception of equity at March 31, 2012 and June 30, 2011 were translated at RMB 6.3185 to $1.00 USD and RMB 6.4635 to $1.00 USD, respectively. The average translation rates applied to income statement amounts for the three month periods ended March 31, 2012 and 2011 were at RMB 6.3088 to $1.00 USD and RMB 6.5804 to $1.00 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the nine month periods ended March 31, 2012 and 2011 were at RMB 6.3626 to $1.00 USD and RMB 6.6703 to $1.00 USD, respectively.Contents

F-Accumulated other comprehensive income related to the foreign currency translation in the consolidated statement of shareholders’ equity amounted to $31,126,520 and $31,772,020 as of September 30, 2012 and June 30, 2012, respectively. The balance sheet amounts with the exception of equity at September 30, 2012 and June 30, 2012 were translated at RMB 6.3265 to $1.00 USD and RMB 6.3143 to $1.00 USD, respectively. The average translation rates applied to income statement amounts for the three month periods ended September 30, 2012 and 2011 were at RMB 6.3257 to $1.00 USD and RMB 6.4132 to $1.00 USD, respectively.

Concentration of Risk

Certain financial instruments, which subject the Company to concentration of credit risk, consist of cash. The Company maintains cash balances at financial institutions or state owned banks within the PRC, which do not provide for insurance against lost funds. The Company also maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits of $250,000 for banks located in the US. Balances at financial institutions or state owned banks within the PRC are not insured and amounted to $614,~~043~~184,~~836~~478 and $711,~~940~~168,~~056~~560 at ~~March~~September 3130, 2012 and June 30, ~~2011~~2012, respectively. As of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012, the Company ~~had~~was ~~$476,724~~within the limits and had $176,~~227~~944,~~500,~~ respectively, in deposits in excess of federally insured limits in its US bank. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash in bank accounts.

The Company operates in the PRC, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility of foreign exchange rates between the USD and RMB.

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the United States and PRC, and by the general state of the economy in the PRC. The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in the US. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The Company is susceptible to credit risk on accounts receivable from customers and advances to suppliers. Generally, the Company does not obtain security from its customers or vendors in support of these accounts.

Payments of dividends may be subject to some restrictions due to the fact that the operating activities are conducted in subsidiaries residing in the PRC.

Fair Value Measurements

Effective January 1, 2009, the FASB ASC Topic 825, “Financial Instruments,” requires disclosure about fair value of financial instruments.

To clarify the definition of fair value for financial reporting, the Company applies the provisions of FASB ASC Subtopic 820-10, “Fair Value Measurements” (FASB Statement No. 157, “Fair Value Measurements”), for fair value measurements of financial assets and financial liabilities and for the fair value measurements of non financial items that are recognized or disclosed at fair value in the financial statements. FASB ASC Subtopic 820-10 also establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.

FASB ASC Subtopic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

FASB ASC Subtopic 820-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC Subtopic 820-10 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.

Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.).

Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).

The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a nonrecurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had a warrant derivative liability carried at fair value on a recurring basis at March 31, 2012.

F-7

The following are the major categories of assets and liabilities measured at fair value on a recurring basis as reported during the nine months ended March 31, 2012, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3). A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Description	Level 1: Quoted Prices in Active Markets for Identical Assets		Level 2: Significant Other Observable Inputs		Level 3: Significant Unobservable Inputs		Total at March 31, 2012
Warrant Derivative Liability	$	-	$	2,291,057	$	-	$	2,291,057
Total	$	-	$	2,291,057	$	-	$	2,291,057

The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

Valuation Techniques

The Company’s financial assets valued based upon Level 2 inputs are comprised of detached common stock purchase warrants, namely the stock warrants issued in connection with the Company’s October 2009 financing. The Company estimated the fair value of the derivative liabilities using a Lattice Pricing Model and available information that management deems most relevant. Among the factors considered in determining the fair value of financial instruments are discounted anticipated cash flow, the cost, terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price and trading history of similarly traded securities, and other factors generally pertinent to the valuation of financial instruments.

The Company did not identify any other nonrecurring assets and liabilities that are required to be presented in the consolidated balance sheets at fair value in accordance with ASC 825.

Reclassification

Certain reclassifications have been made to the consolidated financial statements as of June 30, ~~2011~~2012 and for the ~~nine and~~ three months ended ~~March~~September 3130, 2011 in order to conform to the condensed consolidated financial statement presentation as of and for the ~~nine and~~ three months ended ~~March~~September 3130, 2012. These reclassifications had no effect on net income or cash flows as previously reported.

Recent Accounting Pronouncements

In June 2009, the FASB issued The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (the Codification). The Codification became the single official source of authoritative, nongovernmental U.S. GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption did not have a material impact on the Company’s consolidated financial position or results of operations.

Accounting Standards Update (“ASU”) ASU No. 2010-09 (ASC Topic 855), which amends Subsequent Events Recognition and Disclosures, ASU No. 2009-16 (ASC Topic 860), which amends Accounting for Transfer of Financial Assets, ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures - Overall, ASU No. 2009-08, Earnings per Share, ASU No. 2009-12(ASC Topic 820), Investments in Certain Entities That Calculate Net Asset Value per Share, and various other ASU’s No. 2009-2 through ASU No. ~~2011~~2012-1207 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

Other accounting standards have been issued or proposed by the FASB or other standard-setting bodies that do not require adoption until a future date and are not expected to have a material impact on the Company’s financial statements.

F-8

Segment Reporting

The Company uses the management approach in determining operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decision, allocating resources and assessing performance as the source of determining the Company’s reportable operating segments. The Company’s chief executive officer has been identified as the chief operating decision maker. The Company has determined that it has two reportable operating segments as defined by FASB ASC Subtopic 280-10, “Segment Reporting: Overall”, which are the wholesale distribution of petroleum products, wherein the Company takes possession of the product, and agency fees earned as a sales commission, wherein the Company does not take possession of the product.

NOTE 3 – COMMITMENTS AND CONTINGENCIES

Commitments

The Company has no rent expense or lease commitments for the ~~nine and~~ three month periods ended ~~March~~September 3130, 2012 and 2011.

F-5

Table of Contents

The Company has various purchase commitments for materials, supplies and services incident to the ordinary conduct of business, generally for quantities required for the Company’s business and at prevailing market prices. No material annual loss is expected from these commitments.

The Company has advances to ~~several~~ten refineries for inventory in the amount of $90109,~~188~~578,~~004~~172, which will be offset against future purchases from the suppliers.

Contingencies

In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, environmental matters and tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. As of ~~March~~September 3130, 2012 the Company has not recognized an accrual for any loss contingency.

Legal Matters

The Company is not involved in any legal matters except for those arising in the normal course of business. While incapable of estimation, in the opinion of the management, the individual regulatory and legal matters in which it might be involved in the future are not expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

NOTE 4 – ACCOUNTS RECEIVABLE

The Company’s business operations are conducted in the PRC. During the normal course of business, the Company extends unsecured credit to its customers. Management reviews its accounts receivable on a regular basis to determine if an allowance for doubtful accounts is necessary and adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Through the date of these financial statements, the Company has never experienced a significant bad debt. As a result, no allowance for doubtful accounts has been recorded. Trade accounts receivable as of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012 consisted of the following:

	March 31, 2012 (in thousands)		June 30, 2011 (in thousands)
	September 30, 2012 (in thousands)		June 30, 2012 (in thousands)
Trade Accounts Receivable	$	3230,~~385~~775		$	2333,~~883~~935
Less: Allowance for Doubtful Accounts		-			-
Totals	$	3230,~~385~~775		$	2333,~~883~~935

F-9

NOTE 5 – INVENTORIES

As of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012, inventory consisted of significant quantities of diesel and gasoline, among others, as outlined herein:

	March 31, 2012 (in thousands)		June 30, 2011 (in thousands)
	September 30, 2012 (in thousands)		June 30, 2012 (in thousands)
Diesel	$	3221,~~484~~988	$	26,~~748~~363
Gasoline		2722,~~847~~801		2325,~~907~~472
Fuel Oil		~~468~~1,474		~~548~~563
Solvents		~~503~~1,809		~~286~~221
Total	$	6148,~~302~~072	$	5152,~~489~~619

NOTE 6 – ADVANCES TO SUPPLIERS

As of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012, advances to suppliers consisted of significant deposits on account with the Company’s suppliers, which are petroleum refineries. The deposits are held by the Company’s suppliers to ensure that the delivery of inventory to the Company is made in a timely manner. The Company attempts to maintain a significant balance on account with suppliers with the expectation of receiving preferential pricing and delivery of product from suppliers.

	March 31, 2012 (in thousands)		June 30, 2011 (in thousands)
Advances to Suppliers	$	90,188	$	57,756
Total	$	90,188	$	57,756

F-6

~~NOTE~~Table 7of ~~– DEPOSIT~~Contents

Longwei entered into a letter of intent with Shangxi Jiangtong Chemicals Co., Ltd. (“Jiangtong”) to acquire the assets of Jiangtong’s wholly-owned subsidiary Huajie Petroleum Co., Ltd. (“Huajie”). The Company intends to acquire the assets of a fuel storage depot in northern Shanxi Province (located in Xingyuan, Shanxi) including fuel tanks with a 100,000 metric ton storage capacity. The Company has paid a deposit of 550 million RMB (approximately USD $87.0 million) toward the full purchase price of 700 million RMB (approximately USD $110.8 million). The assets are non-operational with no revenue-producing history and include land use rights for 98 acres of land, 100,000 tonnage fuel tanks with accessory facilities and equipment, a special transportation railway line, and a 3,000-square-meter office building. The acqusition is subject to final due diligence and board approval. The Company intends to use its cash on hand, bank and other financing, and working capital assets to finance the acquisition.

	September 30, 2012 (in thousands)		June 30, 2012 (in thousands)

Advances to Suppliers	$	109,578	$	109,865
Total	$	109,578	$	109,865

~~The~~NOTE ~~Company~~7 ~~engaged~~– ~~a third-party~~PROPERTY, ~~independent~~PLANT ~~valuation~~AND firm for the appraisal of the fair market value of the assets to be acquired. Longwei will account for the purchase of the proposed assets as an asset purchase. The Company will use this accounting treatment for the purchase of assets because the purchase does not meet the definition of a “Business” for a business combination. The accounting requirements for an acquisition of net assets or equity interests that are deemed to be an asset purchase differs from those used for a business combination, which may require audited financial statements of the entity acquired.EQUIPMENT

Because the definition of a business in Rule 11-01(d), differs somewhat from that of ASC 805, the Company has undertaken a separate analysis under Rule 11-01(d) when evaluating the reporting requirements of SEC Regulation S-X, as well as the definition of a Business in ASC 805. Rule 11-01(d) of Regulation S-X defines a business for determining when separate financial statements are required to be filed with the SEC. The principle in the rule is whether there is sufficient continuity in the revenue generating activity so that pre-acquisition financial statements would be meaningful to investors. The assets to be acquired do not meet the definition of a business under rule 11-01(d). FASB ASC Topic 805 defines a business as capable of being conducted and managed as an integrated set of activities utilizing its assets and requires two essential elements - inputs and processes applied to those inputs, which together are or will be used to create outputs. The assets to be acquired have no inputs, no operating history, no employees or other attributes described above, as well as no liabilities or encumbrances and do not meet the definition of a business under ASC 805. Therefore, based on the Company’s evaluations performed for the purposes of determining the accounting treatment of the assets to be acquired, the assets do not constitute a business as defined above and should be properly accounted for as an asset purchase.

F-10

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	March 31, 2012 (in thousands)				June 30, 2011 (in thousands)
	September 30, 2012 (in thousands)				June 30, 2012 (in thousands)
Buildings		$	522,~~375~~459		$	5,~~617~~378
Machinery and Storage Equipment			3684,~~890~~467			3238,~~816~~015
Railway			1437,~~291~~040			14,~~698~~301
Motor Vehicles			~~293~~294			~~287~~294
Total Property, Plant and Equipment			56144,~~849~~260			5357,~~418~~988
Less: Accumulated Depreciation			(911,~~672~~323	)		(710,~~756~~786	)
Property, Plant and Equipment, net			47132,~~177~~937			4547,~~662~~202

Depreciation expense for the ~~nine months ended March 31, 2012 and 2011 was $1,579,932 and $1,399,176, respectively. Depreciation expense for the~~ three months ended ~~March~~September 3130, 2012 and 2011 was $~~534~~557,~~850~~129 and $~~469~~514,~~078~~876, respectively.

NOTE 8 – LAND USE RIGHTS, NET

Land use rights, net consisted of the following:

	September 30, 2012 (in thousands)		June 30, 2012 (in thousands)
Cost of land use rights	$	24,262	$	-
Less: Accumulated amortization		-		-
Land use rights, net	$	24,262	$	-

The Company did not recognize any amortization expense for the three-months ended September 30, 2012 and 2011, respectively. The Company purchased the fixed assets on September 26, 2012 and will begin amortizing the land use rights over 40 years.

NOTE 9 – TAXES

Taxes payable consisted of the following:

	March 31, 2012 (in thousands)		June 30, 2011 (in thousands)
	September 30, 2012 (in thousands)		June 30, 2012 (in thousands)
Income Tax Payable	$	45,~~871~~389	$	64,~~516~~813
Value Added Tax Payable		~~862~~2,027		12,~~404~~510
Business Taxes and Other Payables		~~125~~142		~~176~~364
Total	$	57,~~858~~558	$	87,~~096~~687

Income Taxes

On March 16, 2007, the PRC National People’s Congress passed the PRC Enterprise Income Tax Law (“New EIT Law”) which became effective on January 1, 2008. Pursuant to the New EIT Law, a unified enterprise income tax rate of 25% and unified tax deduction standards will be applied consistently to both domestic-invested enterprises and foreign-invested enterprises.

Taiyuan Yahua Energy Conversion Ltd., ~~and~~ Shanxi Zhonghe Energy Conversion Ltd. and Shanxi Heitan Zhingyou Petrochemical Co. Ltd. are taxed pursuant to the New EIT Law with a unified enterprise income tax rate of 25%. ~~Neither~~None ~~company~~of these companies had income taxes due during the ~~nine month or~~ three month periods ended ~~March~~September 3130, 2012 and 2011. Since these ~~two~~three entities have minimal business operations, the ~~two~~three entities are unlikely to have profits in future periods. As a result, all deferred tax assets and liabilities are deminimus, and management would have a 100% valuation allowance for all deferred tax assets.

The operating subsidiaries of Taiyuan Longwei Economy & Trading Ltd. and its subsidiary Shanxi Heitan Zhingyou Petrochemical Co. Ltd. (Gujiao operations) are taxed pursuant to the New EIT Law with a unified enterprise income tax rate of 25%. These entities had taxes due during the three months ended March 31, 2012 and 2011 of $5,285,942 and $5,859,878, respectively. These entities had taxes due during the nine months ended March 31, 2012 and 2011 of $16,029,457 and $16,809,044, respectively.F-7

Table of Contents

The operating subsidiary of Taiyuan Longwei Economy & Trading Ltd. is taxed pursuant to the New EIT Law with a unified enterprise income tax rate of 25%. This entity had taxes due for the three month periods ended September 30, 2012 and 2011 of $6.2 million and $5.3 million, respectively.

Longwei Petroleum Investment Holding Limited (BVI) is exempt from income tax on all sources of income pursuant to the tax law in the British Virgin Islands. However, pursuant and subsequent to the reverse merger, the parent company in U.S. may pay tax in future years.

United States of America

The Company and its subsidiaries are subject to income taxes on an entity basis on income arising in, or derived from, the tax jurisdiction in which they operate. As the Company has no income generated in the United States, there was no tax expense or tax liability due to the Internal Revenue Service of the United States as of ~~March~~September 3130, 2012 and 2011.

Colorado

The Company is incorporated in the State of Colorado but does not conduct business in Colorado. As the Company has no income generated in the State of Colorado, there was no corporate tax expense or tax liability due to the State of Colorado as of ~~March~~September 3130, 2012 and 2011.

F-11

British Virgin Islands

The Company’s subsidiary, Longwei Petroleum Investment Holding Limited (BVI), is incorporated in the British Virgin Islands and, under the current laws of the British Virgin Islands, is not subject to income taxes. As the Company has no income generated in the British Virgin Islands, there was no corporate tax expense or tax liability due to the British Virgin Islands as of ~~March~~September 3130, 2012 and 2011.

People’s Republic of China

Pursuant to the PRC Income Tax Laws, the prevailing statutory rate of enterprise income is 25% for the Company’s PRC subsidiaries. There is no tax provision in the US for the ~~nine and~~ three month periods ended ~~March~~September 3130, 2012 or 2011, respectively.

	For the Nine Months Ended
	For the Three Months Ended
	March 31, 2012 (in thousands)					March 31, 2011 (in thousands)
	September 30, 2012 (in thousands)				September 30, 2011 (in thousands)
Taxable Income (loss) before income tax
United States	$	$(738	~~(741~~)	)	$	$1,880	~~(1,448~~	)
PRC			64,117				67,072
		24,681				21,295
Total	$	$23,943	~~63,376~~		$	$23,175	~~65,624~~
Provision for Income Taxes
Current income tax	$	$6,170	~~16,029~~		$	$5,324	~~16,809~~
Deferred income tax		-	-			-	-
Total	$	$6,170	~~16,029~~		$	$5,324	~~16,809~~
Effective tax rate – worldwide (PRC rate)		26	25%	%		23	26%	%
Reconciliation of U.S. statutory rate to effective income tax rate
Statutory U.S. tax rate		34	34%	%		34	34%	%
Tax rate difference (between domestic and foreign)		-9	-9%	%		-9	-9%	%
Other*		1	0%	%		(2	1%)	%
Effective worldwide tax rate		26	25%	%		23	26%	%

	For the Three Months Ended
	March 31, 2012 (in thousands)				March 31, 2011 (in thousands)
Taxable Income (loss) before income tax
United States		$	(198	)	$	(429	)
PRC			21,143			23,439
Total		$	20,945		$	23,010
Provision for Income Taxes
Current income tax		$	5,286		$	5,860
Deferred income tax			-			-
Total		$	5,286		$	5,860
Effective tax rate – worldwide (PRC rate)			25	%		25	%
Reconciliation of U.S. statutory rate to effective income tax rate
Statutory U.S. tax rate			34	%		34	%
Tax rate difference (between domestic and foreign)			-9	%		-9	%
Other*			0	%		0	%
Effective worldwide tax rate			25	%		25	%

Other* - The percentage represents the expenses incurred by the Company that were not deductible or taxable for PRC income tax purposes.

Other* F- ~~The percentage represents the expenses incurred by the Company that were not deductable for PRC income tax.~~8

~~The~~Table ~~Company did not have any significant temporary differences relating to deferred tax liabilities as~~ of March 31, 2012 or June 30, 2011. (All of the NOL has 100% allowance.) A valuation allowance for the deferred tax assets is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.Contents

~~F-12~~The Company did not have any significant temporary differences relating to deferred tax liabilities as of September 30, 2012 or June 30, 2012. (All of the NOL has 100% allowance.) A valuation allowance for the deferred tax assets is recorded when it is more likely than not that some or all of the deferred tax assets will not be realized.

Pretax earnings of a foreign subsidiary are subject to U.S. taxation when effectively repatriated. The Company provides income taxes on the undistributed earnings of non-U.S. subsidiaries except to the extent such earnings are indefinitely invested outside of the U.S. As of ~~March~~September 3130, 2012 and 2011, the above accumulated adjusted earnings of non-U.S. subsidiaries was indefinitely invested. At the existing U.S. federal income tax rate, additional U.S. income taxes would have to be provided if such earnings were remitted currently.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and liabilities. The components of the deferred tax assets and liabilities are individually classified as current or non-current based on their characteristics. Deferred tax assets and liabilities are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. A provision has not been made at ~~March~~September 3130, 2012 or June 30, ~~2011~~2012 for U.S. or additional foreign withholding taxes of undistributed earnings of foreign subsidiaries because it is the present intention of management to reinvest the undistributed earnings indefinitely in foreign operations. Generally, such earnings become subject to U.S. tax upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability on such undistributed earnings.

The Company recognizes that virtually all tax positions in the PRC are not free of some degree of uncertainty due to tax law and policy changes by the government. However, the Company cannot reasonably quantify political risk factors and thus must depend on guidance issued by current government officials.

Based on all known facts and circumstances and current tax law, the Company believes that the total amount of unrecognized tax benefits as of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012 are not material to its results of operations, financial condition or cash flows. The Company also believes that the total amount of unrecognized tax benefits as of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012, if recognized, would not have a material effect on its effective tax rate. The Company further believes that there are no tax positions for which it is reasonably possible, based on the current PRC tax law and policy, that the unrecognized tax benefits will significantly increase or decrease over the next twelve months producing, individually or in the aggregate, a material effect on the Company’s results of operations, financial condition or cash flows as of ~~March~~September 3130, 2012 and 2011.

Effective January 1, 2007, the Company adopted ASC 740-10, “Accounting for Uncertainty in Income Taxes” (formerly “FIN 48”, an interpretation of FASB statement No. 109), Accounting for Income Taxes. The interpretation addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740-10 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of ~~March~~September 3130, 2012 and June 30, ~~2011~~2012, the Company does not have a liability for unrecognized tax benefits, but the tax years are still open for examination.

Value Added Tax

In accordance with the relevant taxation laws in the PRC, the normal VAT rate for the Company’s Products for domestic sales is 17%, which is levied on the invoiced value of sales and is payable by the purchaser. The Company is required to remit the VAT it collects to the tax authority. The value added tax refundable represents the VAT that the Company paid for the purchasing products and can be used to deduct the VAT related to the sale of products.

NOTE 10 – PREFERRED STOCK - OCTOBER 2009 FINANCING

On October 29, 2009 ~~(the “Closing Date”)~~, the Company entered into a securities purchase agreement ~~(the “Purchase Agreement”)~~, with several investors, including institutional, accredited and non-US persons and entities (the “Investors”), pursuant to which the Company issued and sold units, comprised of its newly designated Series A Convertible Preferred Stock (the “Series A Preferred Stock”), and warrants (the “Warrants”), for a purchase price of US $1.10 per unit (the “October 2009 ~~financing~~Financing”). The Company sold 13,499,274 units in the aggregate, which included (i) 13,499,274 shares of Series A Preferred Stock and (ii) Warrants to purchase an additional 13,499,274 shares of common stock at an exercise price of US $2.255 per share (the “Exercise Price”) with a three-year term. Gross proceeds totaled $14,849,201, or net proceeds of $12,381,281 net of issuance costs of $2,467,920. The Company’s placement agent also received Warrants to purchase 1,349,927 shares of the Company’s common stock as part of their compensation under the same terms as the Investors.

F-9

Table of Contents

The Exercise Price is subject to adjustments in certain circumstances for stock splits, combinations, dividends and distributions, reclassification, exchange or substitution, reorganization, merger, consolidation or sales of assets, issuance of additional shares of common stock or equivalents. The Warrants may not be exercised if it would result in the holder beneficially owning more than 4.9% of the Company’s outstanding common shares.

F-13

Accounting for the Warrants

The Company analyzed the Warrants in accordance with ASC Topic 815 to determine whether the Warrants meet the definition of a derivative under ASC Topic 815 and, if so, whether the Warrants meet the scope exception of ASC Topic 815, which is that contracts issued or held by the reporting entity that are both (1) indexed to its own stock and (2) classified in stockholders’ equity shall not be considered to be derivative instruments for purposes of ASC Topic 815. The Company adopted the provisions of ASC Topic 815 subtopic 40 “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (“ASC Topic 815 subtopic 40”) on July 1, 2009, which applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative, as defined by ASC Topic 815 and to any freestanding financial instruments that are potentially settled in an entity’s own common stock. As a result of adopting ASC Topic 815 subtopic 40, the Company concluded that the Warrants issued in the October 2009 Financing should be treated as a derivative liability because the Warrants are entitled to a price adjustment provision to allow the ~~Conversion~~Exercise Price to be reduced in the event the Company issues or sells any additional shares of common stock at a price per share less than the then-applicable Exercise Price or without consideration, which is typically referred to as a “down-round protection” or “anti-dilution” provision. According to ASC Topic 815 subtopic 40, the “down-round protection” provision is not considered to be an input to the fair value of a fixed-for-fixed option on equity shares which leads the Warrants to fail to be qualified as indexed to the Company’s own stock and then to fail to meet the scope exceptions of ASC Topic 815. Therefore, the Company accounted for the Warrants as derivative liabilities under ASC Topic 815 (codification of EITF 00-19). Pursuant to ASC Topic 815, derivatives should be measured at fair value and re-measured at fair value with changes in fair value recorded in earnings under the other income/expense in the consolidated statement of operations at each reporting period. During the ~~nine month period ended March 31, 2012 and 2011, the Company recorded a gain on warrant re-valuation of $602,413 and a loss on warrant re-valuation of $7,947,841, respectively. During the~~ three month period ended ~~March~~September 3130, 2012 and 2011, the Company recorded a loss on warrant re-valuation of $~~733~~575,~~177~~138 and a gain on warrant re-valuation of $92,~~220~~126,~~821~~653, respectively.

Fair Value of the Warrants

Fair value is generally based on independent sources such as quoted market prices or dealer price quotations. To the extent certain financial instruments trade infrequently or are non-marketable securities, they may not have readily determinable fair values. The Company estimated the fair value of the Warrants and Series A Preferred Stock using a Lattice Pricing Model and available information that management deems most relevant. Among the factors considered in determining the fair value of financial instruments are discounted anticipated cash flows, the cost, terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price and trading history of similarly traded securities, and other factors generally pertinent to the valuation of financial instruments. The following table provides the valuation inputs used to value the Warrants issued in connection with the October 2009 ~~financing~~Financing.

October 2009 Financing Warrants - Valuation Inputs
Attribute	~~March~~September 3130, 2012			June 30, ~~2011~~2012			October 29, 2009
Stock Price	$	1.6876		$	1.4827		$	2.05
Risk Free Interest Rate		0.5131	%		0.8141	%		1.50	%
Volatility		6869.67	%		6468.05	%		63.9	%
Exercise Price	$	2.255		$	2.255		$	2.255
Dividend Yield		0	%		0	%		0	%
Contractual Life (Years)		0.59			1.35			3.00
Contractual Life (Years)*		0.17			0.33			3.00
Fair Market Value	$	2895,~~291,057~~543		$	2320,~~893,470~~408		$	7,327,517

In accordance with ASC Topic 470-20, “Debt with Conversion and Other Options,” the gross proceeds of $14,849,201 from the October 2009 Financing were first allocated to the warrant derivative based on its fair value of $7,327,517 with the residual value of $7,521,684 allocated to the Series A Preferred Stock as of October 29, 2009. The remeasured fair value of the Warrants as of ~~March~~September 3130, 2012 was $2895,~~291,057~~543.

Key Terms of October 2009 Financing

Additional key terms of the Series A Preferred Stock sold by the Company in the October 2009 Financing are described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on November 2, 2009 and provide the relevant contractual terms and actual copies of the documents associated with the October 2009 Financing.

F-1410

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Stock Warrant Activity

The following is a summary of the Company’s stock warrant activity through ~~March~~September 3130, 2012,. Only ~~only~~ one class of warrants outstanding – related to the October 2009 Financing stock warrants, adjusted for any changes in the exercise price of the stock warrants:

	Stock Warrants		Weighted Average Exercise Price
Outstanding – June 30, 2010		14,849,201	$	2.255
Exercisable – June 30, 2010		14,849,201	$	2.255
Granted		-	$	-
Exercised		(3,306,949)	$	2.255
Forfeited/Cancelled		-	$	-
Outstanding – June 30, 2011		11,542,252	$	2.255
Exercisable – June 30, 2011		11,542,252	$	2.255
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding – March 31, 2012		11,542,252	$	2.255
Outstanding – June 30, 2012		11,542,252	$	2.255
Exercisable – March 31, 2012		11,542,252	$	2.255
Exercisable – June 30, 2012		11,542,252	$	2.255
Granted		-	$	-
Exercised		-	$	-
Forfeited/Cancelled		-	$	-
Outstanding – September 30, 2012		11,542,252	$	2.255
Exercisable – September 30, 2012		11,542,252	$	2.255

The following is a summary of the Company’s stock warrants outstanding as of ~~March~~September 3130, 2012,. Only ~~only~~ one class of warrants outstanding – related to the October 2009 Financing stock warrants, adjusted for any changes in the exercise price of the stock warrants:

Warrants Outstanding							Warrants Exercisable
Range of exercise price		Number Outstanding		Weighted Average Remaining Contractual Life (in years)*	Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	2.255		11,542,252	0.5917 years	$	2.255		11,542,252	$	2.255

*The warrants’ contractual life was extended from an expiration date of October 29, 2012 until November 29, 2012 under the same terms and conditions.

NOTE 11 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 600,000,000 shares, in aggregate, consisting of 500,000,000 shares of common stock, no par value, and 100,000,000 shares of preferred stock, no par value. The Company's current Certificate of Incorporation authorizes the Board of Directors (the “Board”) to determine the preferences, limitations and relative rights of any class or series of preferred stock prior to issuance. Each such class or series must be given distinguishable designated rights prior to issuance. As of ~~March~~September 3130, 2012, the Company had ~~914~~814,643 shares of Series A Preferred Stock and 100,~~766~~989,966 shares of common stock issued and outstanding. As of June 30, ~~2011~~2012, the Company had 914,643 shares of Series A Preferred Stock and 100,~~751~~889,966 shares of common stock issued and outstanding.

Recent Sale of Securities

During the three months ended ~~March~~September 3130, 2012, the Chief Financial Officer earned and was vested in 15,000 shares of restricted common stock pursuant to his consulting agreement. The shares have been accrued as stock based compensation, but have not been issued.

AsDuring ofthe ~~March~~three 31months ended September 30, 2012, the ~~Company~~holders ~~has~~of ~~accrued~~Series 99A Preferred Stock elected to convert an aggregate of 100,000 shares of ~~restricted~~such ~~common~~Series ~~stock~~A ~~previously~~Preferred ~~reported~~Stock ~~under~~into ~~stock~~an ~~based~~aggregate ~~compensation~~of to100,000 ~~the~~shares ~~following~~of ~~persons:~~common stock.

~~(1)~~The 30above referenced transactions did not involve any underwriters,~~000~~ ~~shares~~underwriting discounts or commissions, or any public offering. The issuance of ~~restricted~~these ~~common~~securities ~~stock~~was deemed to be ~~issued~~exempt tofrom ~~its~~the ~~Chief~~registration ~~Financial~~requirements ~~Officer~~of the Securities Act of 1933, as amended, by virtue of the Section 4(2) thereof, as a transaction by an issuer not involving a public offering.

~~(2) 60,000 shares of restricted common stock to be issued to consultants,~~F-11

~~(3)~~Table ~~9,000 shares~~ of ~~restricted common stock to be issued to its directors.~~Contents

Such securities have not been registered under the Securities Act of 1933. The issuance of these shares will be exempted from registration pursuant to Section 4(2) of the Securities Act of 1933.

NOTE 12 – EARNINGS PER SHARE

FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations.

~~F-15~~The Company only has common stock and the following convertible instruments outstanding at September 30, 2012:

~~The~~1. 814,643 ~~Company~~Preferred ~~only~~Shares ~~has~~– ~~common stock and the following~~ convertible ~~instruments~~on ~~outstanding~~a at1:1 ~~March~~basis ~~31,~~for ~~2012:~~common shares

1. 914,643 Preferred Shares – convertible on a 1:1 basis for common shares

2. 11,542,252 October 2009 Financing Warrants – exercisable at $2.255 per share

3. ~~114~~24,000 Common Shares – issuable to officers, directors and consultants under various agreements

Total number of potential additional dilutive common shares outstanding as of ~~March~~September 3130, 2012 was 12,~~570~~380,895 from outstanding convertible instruments.

Basic earnings per share is calculated by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is based on the assumption that all dilutive convertible shares, stock options, warrants and other equity awards were converted or exercised during the period. Dilution is computed by applying the treasury stock method. Under this method, warrants and options are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table sets forth the computation of basic and dilutive net income per share:

	For the Nine Months Ended
	For the Three Months Ended
	March 31, 2012		March 31, 2011
	September 30, 2012		September 30, 2011
Net income attributable to common stockholders	$	47,904,032	$	40,681,747
Net income attributable to common stockholders*	$	17,758,275	$	17,836,126
Basic weighted average outstanding shares of common stock		100,~~762~~961,~~002~~162		96100,~~931~~752,~~079~~129
Weighted number of dilutive shares		1852,~~002,014~~610		4949,~~577,187~~045
Diluted weighted average common stock and common stock equivalents		101,~~764~~813,~~016~~772		101,~~508~~701,~~266~~174
Earnings per share:
Basic	$	0.4818	$	0.4218
Dilutive	$	0.47	$	0.40
Dilutive* (September 30, 2011 – Restated)	$	0.17	$	0.15

	For the Three Months Ended
	March 31, 2012		March 31, 2011
Net income attributable to common stockholders	$	14,911,182	$	26,346,201
Basic weighted average outstanding shares of common stock		100,766,966		100,197,482
Weighted number of dilutive shares		1,028,643		3,834,322
Diluted weighted average common stock and common stock equivalents		101,795,609		102,136,976
Earnings per share:
Basic	$	0.15	$	0.26
Dilutive	$	0.15	$	0.26

*The diluted earnings per share calculation deducts the gain from the warrant derivative liability of $2,126,653 for the three months ended September 30, 2011 from the net income attributable to common stockholders in the numerator for the diluted earnings per share. The diluted earnings per share for the three month period ended September 30, 2011, as previously reported, were $0.18 per share. The diluted earnings per share for the period were recalculated to properly apply the adjustment for the gain from the warrant derivative liability and restated to reflect the adjusted net income attributable to common shareholders of $15,709,473 for the diluted earnings per share calculation.

NOTE 13 - SEGMENT INFORMATION

The Company operates under the following business segments:

	1.	Product Sales - The Company purchases and sells diesel, gasoline, fuel oil and solvents in the PRC.
	2.	Agency Fees - The Company acts as an agent in the purchase and sale of the Products by other intermediaries in the PRC.

Nine Month Period Ended March 31, 2012 (In Thousands)

Three Month Period Ended September 30, 2012 (In Thousands)

Product Sales

Agency Fees

Consolidated Total

Net Sales

~~359~~128,~~036~~156

155,~~200~~229

~~374~~133,~~236~~385

Cost of Sales

~~307~~107,~~983~~954

Operating Income

4819,~~164~~284

155,~~200~~229

6324,~~364~~513

Segment Assets

~~324~~360,~~987~~037

Segment Liabilities

89,~~964~~379

Segment Purchases

2110,~~045~~813

F-1612

	Nine Month Period Ended March 31, 2011 (In Thousands)
	Product Sales		Agency Fees		Consolidated Total
Net Sales	$	336,397	$	16,709	$	353,106
Cost of Sales		283,397		-		283,397
Operating Income		54,081		11,531		65,612
Segment Assets		247,312		-		247,312
Segment Liabilities		10,898		-		10,898
Segment Purchases		1,960		-		1,960

Table of Contents

Three Month Period Ended March 31, 2012 (In Thousands)

Three Month Period Ended September 30, 2011 (In Thousands)

Product Sales

Agency Fees

Consolidated Total

Net Sales

~~124~~113,~~851~~092

45,~~370~~539

~~129~~118,~~221~~631

Cost of Sales

~~107~~96,~~367~~614

Operating Income

1615,~~571~~505

45,~~370~~539

2021,~~941~~044

Segment Assets

~~324~~289,~~987~~385

Segment Liabilities

86,~~964~~949

Segment Purchases

13-

	Three Month Period Ended March 31, 2011 (In Thousands)
	Product Sales		Agency Fees		Consolidated Total
Net Sales	$	114,396	$	5,178	$	119,574
Cost of Sales		95,486		-		95,486
Operating Income		17,829		5,178		23,007
Segment Assets		247,312		-		247,312
Segment Liabilities		10,898		-		10,898
Segment Purchases		-		-		-

Product Sales

The Company derives the bulk of its revenue from sales of diesel, gasoline, fuel oil and solvents. The product sales revenues are recognized when customers take possession of goods in accordance with the terms of purchase order agreements that evidence agreed upon pricing and when collectability is reasonably assured. Cost of revenues for product sales include costs to purchase and transport the product to the Company and costs, if any, to deliver the goods to the customer.

Agency Fees

Agency fee revenues consist of fees, similar to a sales commission, charged to intermediaries who lack the required licenses to purchase directly from refineries, as well as the volume purchasing capability of the Company. Agency fee revenues are recognized when there is evidence of an arrangement that specifies pricing and irrevocable receipt of product and collection has occurred. Cost of agency fee service revenues consists of selling commission, transportation or other costs, if any, associated with the agency fee arrangement. For the ~~nine month and~~ three month periods ended ~~March~~September 3130, 2012 and 2011, respectively, the Company ~~stopped~~did ~~transporting~~not transport or ~~handling~~handle the products associated with the agency fees and only acted in a broker capacity allowing other intermediaries to use its licenses to take possession of the products. The Company considers any costs associated with Agency fee revenues immaterial and has not allocated any costs to Agency fees for the ~~nine month or~~ three month periods ended ~~March~~September 3130, 2012 and 2011, respectively.

NOTE 14 – ~~SUBSEQUENT~~ASSET ~~EVENTS~~PURCHASE

Longwei completed an Asset Purchase Agreement for the purchase of the assets of Huajie Petroleum Co., Ltd. (“Huajie”) on September 26, 2012. The Company acquire the assets of Huajie, a fuel storage depot in northern Shanxi Province (located in Xingyuan, Shanxi) including fuel tanks with a 100,000 metric ton storage capacity. The Company has ~~evaluated~~paid ~~for~~RMB ~~subsequent~~700 ~~events~~million up(approximately toUSD ~~the~~$110.6 ~~date~~million) for the ~~condensed~~assets. The ~~consolidated~~assets ~~financial~~were ~~statements~~non-operational ~~were~~with ~~issued~~no revenue-producing history and included land use rights for 98 acres of land, 100,000 tonnage fuel tanks with accessory facilities and equipment, a special transportation railway line, and a 3,000-square-meter office building. The Company engaged a third-party, independent valuation firm for the appraisal of the fair market value of the assets acquired. Longwei has ~~concluded~~accounted nofor ~~events~~the ~~need~~purchase toof bethe ~~reported~~assets ~~during~~as ~~this~~an ~~period~~asset purchase. The Company used its cash on hand and conversion of working capital assets to finance the acquisition.

~~F-17~~Longwei has accounted for the purchase of the Huajie assets as an Asset Purchase. The Company has used this accounting treatment for the purchase of assets because the purchase does not meet the definition of a “Business” for a business combination. The accounting requirements for an acquisition of net assets or equity interests that are deemed to be an Asset Purchase differs from those used for a Business Combination, which may require audited financial statements of the entity acquired.

Because the definition of a Business in Rule 11-01(d), differs somewhat from that of ASC 805, the Company has undertaken a separate analysis under Rule 11-01(d) when evaluating the reporting requirements of SEC Regulation S-X, as well as the definition of a Business in ASC 805. Rule 11-01(d) of Regulation S-X defines a Business for determining when separate financial statements are required to be filed with the SEC. The principle in the rule is whether there is sufficient continuity in the revenue generating activity so that pre-acquisition financial statements would be meaningful to investors. The assets acquired do not meet the definition of a Business under rule 11-01(d). FASB ASC Topic 805 defines a Business as capable of being conducted and managed as an integrated set of activities utilizing its assets and requires two essential elements - inputs and processes applied to those inputs, which together are or will be used to create outputs. The assets acquired have no inputs, no operating history, no employees or other attributes described above, as well as no liabilities or encumbrances and do not meet the definition of a Business under ASC 805. Therefore, based on the Company’s evaluations performed for the purposes of determining the accounting treatment of the assets acquired, the assets do not constitute a Business as defined above and have been properly accounted for an Asset Purchase.

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NOTE 15 – SUBSEQUENT EVENTS

The Company has evaluated for subsequent events up to the date the condensed consolidated financial statements were issued, and has concluded the following events need to be reported during this period:

On October 17, 2012, Holders of Series A Preferred Stock elected to convert an aggregate of 100,000 shares of such Series A Preferred Stock into an aggregate of 100,000 shares of common stock.

On October 29, 2012, the holders of Warrants elected to exercise an aggregate of 314,603 Warrants into an aggregate of 314,603 shares of common stock for aggregate proceeds to the Company of $709,430 in cash.

On November 6, 2012, the holders of Warrants elected to exercise an aggregate of 29,700 Warrants into an aggregate of 29,700 shares of common stock for aggregate proceeds to the Company of $66,974 in cash.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR RESULTS OF OPERATIONS.

This report contains forward-looking statements that involve risks and uncertainties. We generally use words such as “believe,” “may,” “could,” “will,” “intend,” “expect,” “anticipate,” “plan,” and similar expressions to identify forward-looking statements, including statements regarding our ability to continue to generate new business based on our sales and marketing efforts, referrals and existing relationships, our financing strategy and ability to access the capital markets and other risks discussed in our Risk Factor section included in our Form 10-K for the year ended June 30, ~~2011~~2012, as filed with the Securities and Exchange Commission on September 13, ~~2011~~2012. Although we believe the expectations expressed in the forward-looking statements included in this Form 10-Q are based on reasonable assumptions within the bounds of our knowledge of our business, a number of factors could cause our actual results to differ materially from those expressed in any forward-looking statements. We cannot assure you that the results or developments expected or anticipated by us will be realized or, even if substantially realized, that those results or developments will result in the expected consequences for us or affect us, our business or our operations in the way we expect. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of their dates. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our expectations, except as required by law.

Highlights and Executive Summary

Longwei Petroleum Investment Holding Limited (the “Company”) is an energy company engaged in the wholesale distribution of finished petroleum products in the PRC. Our oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. We purchase diesel, gasoline, fuel oil and solvents from various petroleum refineries in the PRC. Our headquarters are located in Taiyuan, Shanxi Province. We have a total storage capacity for our products of ~~120~~220,000 metric tons located at ~~our fuel depot~~ three storage facilities inwithin ~~Taiyuan and in Gujiao,~~ Shanxi,: ~~with 50~~Taiyuan,~~000~~ ~~metric~~Gujiao ~~tons~~ and 70Huajie,~~000~~ ~~metric~~which ~~tons~~have ~~capacity,~~an ~~respectively~~individual atstorage ~~each~~capacity ~~location.~~of ~~The~~approximately ~~Gujiao~~50,000mt, ~~facility~~70,000mt ~~was acquired in January of 2009~~ and ~~commenced~~100,000mt, ~~operations in November of 2010~~respectively. We are 1 of 3 licensed intermediaries in Taiyuan and the sole licensed intermediary in regions around Gujiao and Huajie that operates its own large scale storage tanks. We have the necessary licenses to operate and sell products not only in Shanxi but throughout the entire PRC. Our storage tanks have the largest storage capacity of any private enterprise in Shanxi. We seek to earn profits by selling our products at competitive prices with timely delivery to transportation companies, coal mining operations, power supply and industrial customers, large-scale gas stations and small, independent gas stations. We also earn revenue under an agency fee by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at our facilities in Taiyuan and Gujiao. The sales price and the cost basis of our products is largely dependent on regulations and retail price control measures instituted and controlled by the PRC government, as well as the price of crude oil. The price of crude oil is subject to fluctuation due to a variety of factors, all of which are beyond our control.

We were incorporated under the laws of the State of Colorado on March 17, 2000 as Tabatha II, Inc. On October 12, 2007, we changed our name to Longwei Petroleum Investment Holding Limited.

RESULTS OF OPERATIONS

(All numbers referenced are "in thousands,” except price per metric ton “mt” and earnings per share)

For the Three Months Ended ~~March~~September 3130, 2012 Compared to the Three Months Ended ~~March~~September 3130, 2011

Revenues

For the three months ended ~~March~~September 3130, 2012, we reported revenues of $~~129~~133,~~221~~385, an increase of $914,~~647~~754 or 812.14% from revenues of $~~119~~118,~~574~~631 reported for the three months ended ~~March~~September 3130, 2011. ~~Our~~The ~~Taiyuan~~revenue ~~and~~increase ~~Gujiao~~was ~~fuel~~due ~~storage~~to ~~depots~~the ~~generated~~increase ~~revenues of $60,558 and $64,293, respectively, and we earned an additional $4,370~~ in ~~agency~~product ~~fees~~sales ~~during~~volume ~~the~~of ~~three months ended March 31, 2012~~17. ~~During~~8% ~~this~~year-over-year ~~period~~as ~~our~~a ~~product~~result ~~mix~~of ~~was~~improving ~~approximately~~economic ~~split~~conditions ~~between diesel (52%), gasoline (47%),~~ and ~~other~~regional ~~petroleum products (1%) sales~~growth. ~~The~~Revenue ~~sales~~growth ~~increase~~ was ~~due~~offset toby the ~~increase~~3.8% decrease in ~~product~~the ~~sales price. The~~ weighted average sales price per metric ton (“mt”) of petroleum products sold, ~~increased~~which ~~approximately~~dropped ~~16.0%~~ to $1,~~226~~159/mt from $1,~~057~~205/mt during the three months ended ~~March~~September 3130, 2012 and 2011, respectively.

	For the Three Months Ended
	March 31,		March 31,
(in thousands, except metric tons)	2012		2011		% Change
Product Sales:
Taiyuan Facility	$	60,558	$	63,100		(4.0%	)
Gujiao Facility		64,293		51,296		25.3%
Total Product Sales		124,851		114,396		9.1%
Agency Fees		4,370		5,178		(15.6%	)
Total Revenues	$	129,221	$	119,574		8.1%
Sales Volume: (mt)
Taiyuan Facility		49,956		60,140		(16.9%	)
Gujiao Facility		51,900		48,076		8.0%
Total Sales Volume		101,856		108,216		(5.9%	)
Weighted average selling price per mt	$1,226/mt		$1,057/mt			16.0%

Our revenues are derived from two segments including direct product sales and agency fees. For direct product sales we purchase, take physical possession, and sell diesel, gasoline, fuel oil and solvents. For agency fees we act as a purchasing agent earning a fee or commission by allowing intermediaries to use our licenses and buying power to purchase directly from the refineries. For the three months ended September 30, 2012, our product sales were $128,156, an increase of $15,064 or 13.3% from $113,092, and our agency fees were $5,229, a decrease of $310 or 5.6%, from $5,539, respectively, over the three months ended September 30, 2011.

Our Taiyuan and Gujiao fuel storage depots generated revenues of $70,541 and $57,618, respectively during the three months ended September 30, 2012. This is an increase of 21.1% and 5.1% for our two facilities, respectively, which generated revenues of $58,249 and $54,843 for the three months ended September 30, 2011. For the three months ended September 30, 2012 and 2011, direct product sales revenues accounted for 96.1% and 95.3% of total revenues and agency fees accounted for 3.9% and 4.7% of total revenues, respectively.

WeTable continue to allocate product sales between our two facilities, Taiyuan and Gujiao, to better serve our customer base. The two facilities are approximately 30 kilometers apart and their service markets overlap. Total sales volume for the three month period ended March 31, 2012 dropped 5.9% to 101,856mt from 108,216mt for the three month period ended March 31, 2011. The drop in volume was primarily due to rising fuel prices between the periods and the PRC’s attempts to slow down economic growth. During this timeframe we also declined certain sales opportunities to maintain our margins during a period of rising inventory costs, as well as carefully managed our cash flow due to the large deposit paid for the Huajie Petroleum assets. The deposit of $87,046 has been paid in cash generated through operations.Contents

~~The~~Our ~~increase~~revenue inand ~~the~~volume ~~price~~activity ~~per~~are mtbroken ofdown ~~petroleum~~below ~~products was due to the increase in international crude oil prices and corresponding price increases set~~ by ~~the~~facility PRC to retail petroleum prices. During the time from three month period ended March 31, 2011 through the three month period ended March 31, 2012, the PRC increased retail petroleum prices four times, but decreased retail prices once in October 2011.year-over-year:

	For the Three Months Ended
	September 30,		September 30,
(in thousands, except metric tons)	2012		2011		% Change
Product Sales:
Taiyuan Facility	$	70,541	$	58,249		21.1%
Gujiao Facility		57,618		54,843		5.1%
Total Product Sales		128,156		113,092		13.3%

Agency Fees		5,229		5,539		(5.6%	)

Total Revenues	$	133,385	$	118,631		12.4%

Sales Volume: (mt)
Taiyuan Facility		62,637		50,018		35.2%
Gujiao Facility		47,950		43,844		9.4%
Total Sales Volume		110,587		93,862		17.8%

Weighted average selling price per mt	$1,159/mt		$1,205/mt			(3.8%	)

The decrease in the price per mt of petroleum products was due to the average decrease in international crude oil prices in the prior quarter and corresponding price decreases set by the PRC to retail petroleum prices. During the timeframe from fiscal year end June 30, 2011 through September 30, 2012, the PRC decreased retail petroleum prices four times, but also increased retail prices four times, most recently in August and September 2012.

Brent Crude Price vs. PRC Retail Prices – Price Trend Lines

Sales for our third fiscal quarter of 2012 (three months ended March 31, 2012) increased $2,837 or 2.2% to $129,221 from $126,384 for the second fiscal quarter of 2012 (three months ended December 31, 2011). During the third fiscal quarter of 2012 the weighted average sales price per mt of petroleum products sold increased approximately $50/mt or 4.3% to $1,226/mt from $1,176/mt because of retail price increases in both February 2012 (300 RMB or approximately $48/mt) and March 2012 (600RMB or approximately $95/mt). These price increases more closely aligned the PRC retail petroleum prices to the world prices based on the increase in crude oil prices.

Our volume sales decreased 1,089mt or 1.1% during the third fiscal quarter of 2012 to 101,856mt from 102,945mt for the second fiscal quarter of 2012. The Chinese New Year is typically celebrated during our third fiscal quarter ended March 31. During this national holiday celebration the Company’s operating activities are significantly curtailed for approximately two weeks.

Costs of Sales

Costs of sales increased by $11,~~881~~340 or 1211.47% to $107,~~367~~954 for the three months ended ~~March~~September 3130, 2012 compared to $9596,~~486~~614 for the three months ended ~~March~~September 3130, 2011. As a percentage of total revenues our total cost of sales between the periods ~~increased~~decreased by 30.25% as a percentage of revenues to 8380.19% from 7981.94%. The ~~increase~~decrease in cost of sales as a percentage of revenues was primarily due to ~~higher~~the lower weighted average inventory costs from inventory purchased in the prior quarter during a period of ~~rising~~declining international prices and a current period of ~~lower~~rising retail petroleum prices implemented by the PRC in ~~October~~August ~~2011. The PRC retail price was subsequently increased in February~~ and ~~March~~September 2012 ~~to more accurately reflect worldwide crude oil prices~~.

~~The Company also experienced a drop in agency fee revenues of $808 or 15.6% to $~~4,370 during the three months ended March 31, 2012 compared to $5,178 during the three months ended March 31, 2011. When the Company earns higher agency fees, the net effect lowers the percentage of total cost of sales because there are no costs associated with the agency fees.

WeTable ~~pay market prices from our refinery suppliers and carefully manage our inventory levels to adjust to pricing fluctuations. The three-month weighted average cost basis per metric ton~~ of petroleum product we sold increased by $172/mt or 19.5% to $1,054mt from $882/mt during the three months ended March 31, 2012 and 2011, respectively. During the three month period ended March 31, 2012, the Company’s gross profit margin on product sales declined 15.7% to 14.0% from 16.6% during the three month period ended March 31, 2011, because of higher inventory costs due to rising international crude oil prices.Contents

		For the Three Months Ended
		March 31,		March 31,
		2012		2011	% Change
Product Sales Revenue and Cost per metric ton (“mt”)
Weighted average selling price/mt	$	1,226/mt	$	1,057/mt		16.0	%
Weighted average cost/mt		1,054/mt		882/mt		19.5	%
Gross profit/mt	$	172/mt	$	175/mt		(1.7	%)
Gross profit margin		14.0%		16.6%		(15.7	%)

We pay market prices to our refinery suppliers and carefully manage our inventory levels to adjust to pricing fluctuations. The three-month weighted average cost basis per metric ton of petroleum product we sold decreased by $53/mt or 5.2% to $976mt from $1,029/mt during the three months ended September 30, 2012 and 2011, respectively. During the three month period ended September 30, 2012, the Company’s gross profit margin on product sales increased 8.2% to 15.8% from 14.6% during the three month period ended September 30, 2011, because of lower average inventory costs due to prior decreases in international crude oil prices. International crude oil prices have subsequently increased, but the PRC has also increased the retail price of petroleum to more accurately reflect the fluctuations in worldwide crude oil prices.

Cost of sales for our third fiscal quarter of 2012 (three months ended March 31, 2012) increased $3,365 or 3.2% to $107,367 from $104,002 for the second fiscal quarter of 2012 (three months ended December 31, 2011). As a percentage of total revenues our total cost of sales between the quarters increased by 0.8% as a percentage of revenues to 83.1% from 82.3%. The ~~increase~~Company inalso ~~the~~experienced ~~total cost of sales as~~ a ~~percentage~~drop ~~of total revenues was primarily because of the decrease~~ in agency fee revenues of $~~921~~310 or 175.46% to $45,~~370~~229 during the three months ended ~~March~~September 3130, 2012 compared to $5,~~291during~~539 during the three months ended ~~December~~September 3130, 2011. When the Company earns higher agency fees, the net effect lowers the percentage of total cost of sales because there are no costs associated with the agency fees.

During the third fiscal quarter of 2012 the weighted average cost per mt of petroleum products sold increased approximately $44/mt or 4.4% to $1,054/mt from $1,010/mt during the second fiscal quarter of 2012 because of rising international crude prices. However, the gross profit on product sales improved $6/mt or 3.6% to $172/mt (14.0% gross profit margin on product sales) during the three months ended March 31, 2012 as compared to $166/mt (14.1% gross profit margin on product sales) during the three months ended December 31, 2011. The improved gross profit is primarily due to the PRC price increases in February and March 2012 to more accurately reflect worldwide crude oil process.

	For the Three Months Ended
	September 30,	September 30,
	2012	2011	% Change
Product Sales Revenue and Cost per metric ton (“mt”)
Weighted average selling price/mt	$1,159/mt	$1,205/mt		(3.8	%)
Weighted average cost/mt	976/mt	1,029/mt		(5.2	%)
Gross profit/mt	$183/mt	$176/mt		3.4	%

Gross profit margin	15.8%	14.6%		8.2	%

~~The~~Cost ~~cost basis~~ of ~~finished~~sales ~~petroleum~~for ~~products~~our ~~fluctuates~~first ~~during~~fiscal ~~the~~quarter ~~year~~of ~~due~~2013 to(three ~~the~~months ~~pricing~~ended ~~mechanism~~September in30, ~~place~~2012) indecreased ~~the~~$6,181 ~~PRC~~or 5. ~~The~~4% ~~price~~to of$107,954 ~~finished~~from ~~petroleum~~$114,135 ~~products~~for isthe ~~established~~fourth byfiscal aquarter ~~PRC~~of ~~regulatory~~2012 ~~body,~~(three ~~National~~months ~~Regulatory~~ended ~~Development~~June ~~Commission~~30, ~~(“NDRC”~~2012),. As ~~under~~ a ~~formula~~percentage ~~based on the movement~~ of ~~international~~total ~~prices~~revenues ~~over~~our atotal ~~look-back~~cost ~~period~~ of 22sales ~~working~~between ~~days and generally resets when~~ the ~~price~~quarters ~~increases~~decreased ~~or decreases~~ by 4%2. ~~The~~8% ~~NDRC~~as ~~adjusts~~a ~~domestic~~percentage ~~finished oil prices by modifying the retail price~~ of ~~gasoline~~revenues ~~and~~to ~~diesel~~80.9% infrom ~~all provinces, which has an upstream pricing effect over the wholesale price of finished oil products~~83.7%. WeThe ~~attempt~~decrease toin ~~manage our costs by utilizing our storage capacity to adjust inventory levels based on~~ the ~~anticipated~~total ~~movement~~cost of ~~industry~~sales ~~pricing~~as toa ~~take~~percentage ~~advantage~~ of ~~pricing~~total ~~and supply~~revenues ~~and~~was ~~demand~~due ~~fluctuations~~to ~~within~~ the ~~marketplace. The~~decrease ~~Company’s~~in ~~average age of inventory for~~ the ~~three~~weighted ~~months~~average ~~ended~~cost ~~March~~per ~~31,~~mt. During ~~2012 was approximately 50 days as~~ the ~~Company~~ ~~held~~first ~~more~~fiscal ~~inventory to~~quarter ~~take advantage~~ of ~~additional~~2013 ~~product~~the ~~purchases~~weighted ~~for~~average ~~on-hand~~cost ~~inventory~~per ~~during~~mt ~~a period~~ of ~~rising~~petroleum ~~prices~~products bysold ~~utilizing~~decreased ~~our~~approximately ~~large~~$60/mt ~~storage~~or ~~capacity~~5. ~~This~~8% ~~compares~~ to ~~the~~$976/mt ~~Company’s~~from ~~average~~$1,036/mt ~~age~~during ~~of inventory for~~ the ~~three~~fourth ~~months~~fiscal ~~ended~~quarter ~~March~~of ~~31,~~2012 ~~2011~~because of ~~approximately~~good 51inventory ~~days~~management ~~also~~ during adeclining ~~time rising prices for international~~ crude oil prices. ~~During~~The ~~this~~gross ~~time~~profit weon ~~also~~product ~~increased~~sales ~~our~~improved ~~advances~~$31/mt toor ~~suppliers~~20.4% to ~~lock~~$183/mt in(15.8% ~~pricing~~gross ~~based~~profit margin on ~~uncertainty~~product ~~associated~~sales) ~~with~~during the ~~international~~three ~~crude~~months ~~oil~~ended ~~price~~September ~~fluctuations~~30, ~~from~~2012 ~~tensions~~as incompared ~~the~~to ~~Middle~~$152/mt ~~East~~(12. ~~The~~8% ~~Company~~gross isprofit ~~continually~~margin ~~working~~on toproduct ~~optimize~~sales) ~~its~~during ~~inventory~~the ~~turnover,~~three ~~which~~months ~~expands~~ended ~~sales~~June ~~capacity~~30, ~~based on increased inventory movement~~2012. InThe ~~times~~improved ofgross ~~anticipated~~profit ~~rising~~was ~~prices~~primarily ~~the~~due ~~Company tries~~ to ~~lock-in pricing and increase inventory on-hand prior to~~ the PRC ~~pricing mechanism adjusting the set retail~~ price ~~upwards. Our~~increases ~~supplier advance balance with refineries allows us to lock-~~in ~~pricing~~February and ~~supply~~March so2012 ~~that we can react quickly~~ to ~~purchases~~more ~~based~~accurately onreflect ~~anticipated~~worldwide ~~movements in the international price of~~ crude oil ~~and the timing of the PRC pricing levels adjustments~~prices.

The Company experienced a slight drop in agency fee revenues of $99 or 1.9% to $5,229 during the three months ended September 30, 2012 compared to $5,328 during the three months ended June 30, 2012.

The cost basis of finished petroleum products fluctuates during the year due to the pricing mechanism in place in the PRC. The price of finished petroleum products is established by a PRC regulatory body, National Regulatory Development Commission (“NDRC”), under a formula based on the movement of international prices over a look-back period of 22 working days and generally resets when the price increases or decreases by 4%. The NDRC adjusts domestic finished oil prices by modifying the retail price of gasoline and diesel in all provinces, which has an upstream pricing effect over the wholesale price of finished oil products. We attempt to manage our costs by utilizing our storage capacity to adjust inventory levels based on the anticipated movement of industry pricing to take advantage of pricing and supply and demand fluctuations within the marketplace. The Company’s average age of inventory for the three months ended September 30, 2012 decreased to approximately 42 days as the Company turned on-hand inventory more quickly, but held more inventory through advances to suppliers by locking in petroleum pricing in the prior quarter when prices were at lower levels. This compares to the Company’s average age of inventory for the three months ended September 30, 2011 of approximately 55 days during a time of fluctuating prices for international crude oil. At September 30, 2012 our advances to suppliers were $109,578 compared to $64,522 at September 30, 2011. The Company is continually working to optimize its inventory turnover, which expands sales capacity based on increased inventory movement, and advances to suppliers. In times of anticipated price movements the Company tries to lock-in pricing and adjust inventory on-hand prior to the PRC pricing mechanism adjusting the retail price. Our supplier advance balance with refineries allows us to lock-in pricing and supply so that we can react quickly to purchases based on anticipated movements in the international price of crude oil and the timing of the PRC pricing levels adjustments.

Operating Expenses

Operating expenses for the three months ended ~~March~~September 3130, 2012 decreased $~~168~~55 or ~~15.~~5.7% to $~~913~~918 as compared to $~~1,081~~973 for the three months ended ~~March~~September 3130, 2011, due primarily to lower professional fees paid during the period. As a percentage of revenues, operating expenses declined to 0.7% for the three months ended ~~March~~September 3130, 2012 from 0.98% for the three months ended ~~March~~September 3130, 2011. Operating expenses during 2012 included non-cash expenses of $~~535~~557 in depreciation and $17 in accrued stock based compensation. The Company paid approximately $~~361~~344 in cash payments for salaries, consulting and professional fees, insurance and travel primarily related to fees and expenses for administration and the operations of the public company. Operating expenses during 2011 ~~included~~consisted of non-cash expenses of $~~469~~515 in depreciation and $~~227~~17 in stock based compensation. The Company paid $~~385~~441 in cash payments for salaries, consulting and professional fees, insurance and travel primarily related to fees and expenses ~~for~~related ~~administration~~to ~~and~~ the operations of the public company.

Operating Income

Operating income for the three months ended March 31, 2012 decreased $2,066 or 9.0% to $20,941 from $23,007 for the three months ended March 31, 2011, primarily due to the price increases in the petroleum market and retail price decrease in the PRC, which reduced the Company’s overall gross profit margin 3.2% between the periods.

~~Income~~Table ~~Before~~of ~~Taxes~~Contents

Income before taxes for the three months ended March 31, 2012 decreased $12,019 or 37.3% to $20,212 as compared to $32,231 for the three months ended March 31, 2011 primarily due to the increase in other income/expenses associated with the accounting for the non-cash warrant derivative liability charge.

Other income/expenses for the three months ended March 31, 2012 were primarily related to the non-cash expense charge for the change in the warrant derivative liability of ($733). Other income for the three months ended March 31, 2011 were primarily related to the non-cash income reported for the change in the warrant derivative liability of $9,221. The non-cash income and expense are accounted for in accordance with GAAP for the change in the fair value of the warrant derivative liability. If the non-cash adjustment had not been required to be recorded, the Company’s income before taxes would have decreased $2,065 or 9.0% to $20,945 from $23,010 for the three months ended March 31, 2012 as compared to the three months ended March 31, 2011.

The interest income increased $1 for the period to $4 for the three months ended March 31, 2012 from $3 for the three months ended March 31, 2011 because of higher average cash balances during the period. The Company had no outstanding long-term debt.

Income tax expense for the three months ended March 31, 2012 decreased $574 or 10.0% to $5,286 from $5,860 for the three months ended March 31, 2011, due to the decrease in operating income earned during the period.

Net Income

Net income decreased $11,445 or 43.4% to $14,926 for the three months ended March 31, 2012 from $26,371 for the three months ended March 31, 2011, due to the reasons set forth above.

Comprehensive income for the three months ended March 31, 2012 decreased $12,843 or 43.3% to $16,800 from $29,643 for the three months ended March 31, 2011, due to the decrease in net income. The foreign currency translation adjustment decreased $1,398 or 42.7% to $1,874 for the three months ended March 31, 2012 from $3,272 for the three months ended March 31, 2011.

Net income attributable to common shareholders decreased by $11,435 or 43.4% to $14,911 for the three months ended March 31, 2012 from $26,346 for the three months ended March 31, 2011. For the three months ended March 31, 2012 we paid $15 in cash dividends on preferred stock compared to $25 in cash dividends paid on preferred stock for the three months ended March 31, 2011.

Basic and Diluted Income Attributable to Common Shareholders per Share

The Company’s basic net income attributable to common shareholders per share decreased $0.11 or 42.3% to $0.15 from $0.26 for the three months ended March 31, 2012 and 2011, respectively.

The Company’s diluted net income attributable to common shareholders per share decreased $0.11 or 42.3% to $0.15 from $0.26 for the three months ended March 31, 2012 and 2011, respectively.

For the Nine Months Ended March 31, 2012 Compared to the Nine Months Ended March 31, 2011

Revenues

For the nine months ended March 31, 2012, we reported revenues of $374,236, an increase of $21,130 or 6.0% from revenues of $353,106 reported for the nine months ended March 31, 2011. Our Taiyuan and Gujiao fuel storage depots generated revenues of $183,671 and $175,365, respectively, and we earned an additional $15,200 in agency fees during the nine months ended March 31, 2012. During this period our product mix was approximately split evenly between diesel and gasoline sales. The sales increase was due to the increase in product sales price. The weighted average sales price per metric ton (“mt”) of petroleum products sold increased approximately $229/mt or 23.5% to $1,202/mt from $973/mt during the nine months ended March 31, 2012 and 2011, respectively.

	For the Nine Months Ended
	March 31,		March 31,
(in thousands, except metric tons)	2012		2011		% Change
Product Sales:
Taiyuan Facility	$	183,671	$	198,332		(7.4%	)
Gujiao Facility		175,365		138,065		27.0%
Total Product Sales		359,036		336,397		6.7%
Agency Fees		15,200		16,709		(9.0%	)
Total Revenues	$	374,236	$	353,106		6.0%
Sales Volume: (mt)
Taiyuan Facility		155,378		205,167		(24.3%	)
Gujiao Facility		143,286		140,608		1.9%
Total Sales Volume		298,664		345,775		(13.6%	)
Weighted average selling price per mt	$1,202/mt		$973/mt			23.5%

The increase in the price per mt of petroleum products was due to the increase in international crude oil prices and corresponding price increases set by the PRC to retail petroleum prices. During the time from nine month period ended March 31, 2011 through the nine month period ended March 31, 2012, the PRC increased retail petroleum prices six times, but decreased retail prices once in October 2011.

We continue to allocate product sales between our two facilities, Taiyuan and Gujiao, to better serve our customer base. The two facilities are approximately 30 kilometers apart and their service markets overlap. Total sales volume for the nine month period ended March 31, 2012 dropped 13.6% to 298,664mt from 345,775mt for the nine month period ended March 31, 2011. The drop in volume was primarily due to rising fuel prices and the PRC’s attempts to slow down economic growth. During this timeframe we also declined certain sales opportunities to maintain our margins, as well as carefully managed our cash flow due to the large deposit paid for the Haujie Petroleum assets. The deposit of $87,046 has been paid in cash generated through operations.

Costs of Sales

Costs of sales increased by $24,586 or 8.7% to $307,983 for the nine months ended March 31, 2012 compared to $283,397 for the nine months ended March 31, 2011. As a percentage of total revenues our total cost of sales between the periods increased by 2.0% as a percentage of revenues to 82.3% from 80.3%. The increase in cost of sales was primarily due to higher weighted average inventory costs during a period of rising international prices and a period of lower retail prices implemented by the PRC in October 2011. The PRC retail price was subsequently increased in February and March 2012 to more accurately reflect worldwide crude oil prices.

The Company also experienced a drop in agency fee revenues of $1,509 or 9.0% to $15,200 during the nine months ended March 31, 2012 compared to $16,709 during the nine months ended March 31, 2011. When the Company earns higher agency fees, the net effect lowers the percentage of total cost of sales because there are no costs associated with the agency fees.

We pay market prices from our refinery suppliers and carefully manage our inventory levels to adjust to pricing fluctuations. The nine month weighted average cost basis per metric ton of petroleum product we sold increased by $211/mt or 25.7% to $1,031/mt from $820/mt during the nine months ended March 31, 2012 and 2011, respectively. During the nine months ended March 31, 2012, the Company’s gross profit margin on product sales declined 9.6% to 14.2% from 15.7% during the nine month period ended March 31, 2011, due to rising international crude oil prices and the PRC retail price decrease in October 2011.

The Company’s average age of inventory for the nine months ended March 31, 2012 increased to approximately 50 days as the Company held more inventory to take advantage of additional product purchases for on-hand inventory during a period of rising prices by utilizing our large storage capacity. This compares to the Company’s average age of inventory for the nine months ended March 31, 2011 of approximately 44 days during a time as the price of international crude oil began to rise steadily. During this time we also increased our advances to suppliers to lock in pricing based on uncertainty associated with the international crude oil price fluctuations from tensions in the Middle East. The Company is continually working to optimize its inventory turnover, which expands sales capacity based on increased inventory movement. In times of anticipated rising prices the Company tries to lock-in pricing and increase inventory on-hand prior to the PRC pricing mechanism adjusting the set retail price upwards. Our supplier advance balance with refineries allows us to lock-in supply so that we can react quickly to purchases based on the timing of the PRC pricing levels adjustments.

		For the Nine Months Ended
		March 31,		March 31,
		2012		2011	% Change
Product Sales Revenue and Cost per metric ton (“mt”)
Weighted average selling price/mt	$	1,202/mt	$	973/mt		23.5	%
Weighted average cost/mt		1,031/mt		820/mt		25.7	%
Gross profit/mt	$	171/mt	$	153/mt		11.8	%
Gross profit margin		14.2%		15.7%		(9.6	%)

Operating Expenses

Operating expenses for the nine months ended March 31, 2012 decreased $1,208 or 29.5% to $2,889 as compared to $4,097 for the nine months ended March 31, 2011, due primarily to lower professional fees paid, including stock based compensation during the period. As a percentage of revenues, operating expenses declined to 0.8% for the nine months ended March 31, 2012 from 1.2% for the nine months ended March 31, 2011. Operating expenses during the nine months ended March 31, 2012 included non-cash expenses of $1,580 in depreciation and $136 in accrued stock based compensation. The Company paid approximately $1,173 in cash payments for salaries, consulting and professional fees, insurance and travel primarily related to fees and expenses for administration and the operations of the public company. Operating expenses during the nine months ended March 31, 2011 included non-cash expenses of $1,399 in depreciation and $857 in stock based compensation. The Company paid $1,841 in cash payments for salaries, consulting and professional fees, insurance and travel primarily related to fees and expenses for administration and the operations of the public company.

Operating Income

Operating income for the ~~nine~~three months ended ~~March~~September 3130, 2012 ~~decreased~~increased $23,~~248~~469 or 316.45% to $6324,~~364~~513 from $6521,~~612~~044 for the ~~nine~~three months ended ~~March~~September 3130, 2011, ~~primarily~~ due to the ~~price~~increase ~~increases~~ in ~~the~~product ~~petroleum~~sales ~~market~~volume ~~and~~of ~~retail~~17.8% ~~price~~year-over-year ~~decrease~~as ina ~~the~~result ~~PRC,~~of ~~which~~improving ~~reduced~~economic conditions and regional growth and the ~~Company’s~~increase in overall gross profit margin 2.of 0.5% ~~between~~due ~~the~~to ~~periods~~lower average inventory costs.

Income Before Taxes

Income before taxes for the ~~nine~~three months ended ~~March~~September 3130, 2012 increased $~~6,302~~768 or 103.93% to $6323,~~978~~943 as compared to $5723,~~676~~175 for the ~~nine~~three months ended ~~March~~September 3130, 2011 primarily due to the increase in ~~other~~the ~~income/expenses~~warrant derivative liability expense associated with the accounting for the non-cash warrant derivative liability charge.

Other ~~income/~~expenses for the ~~nine~~three months ended ~~March~~September 3130, 2012 were ~~primarily~~ related to the non-cash ~~income~~expense ~~reported~~charge for the change in the warrant derivative liability of ($~~602~~575). Other income~~/expenses~~ for the ~~nine~~three months ended ~~March~~September 3130, 2011 ~~were~~was ~~primarily~~ related to the ~~expense~~non-cash ~~charge~~income reported for the change in the warrant derivative liability of $72,~~948~~127. InThe ~~accordance with GAAP, we recorded the~~ non-cash income and expense ~~charge~~are accounted for in accordance with GAAP for the change in the fair value of the warrant derivative, ~~which increased $8,550 between the nine months ended March 31, 2012 and 2011, respectively~~liability. If the non-cash adjustment had not been ~~necessary~~required to be recorded, the Company’s income before taxes would have ~~decreased~~increased $23,~~248~~470 or 316.45% to $6324,~~376~~518 from $6521,~~624~~048 for the ~~nine~~three months ended ~~March~~September 3130, 2012 as compared to the ~~nine~~three months ended ~~March~~September 3130, 2011.

The financial instrument classified as derivatives consisted of Warrants to purchase shares of our common stock issued in connection with our October 2009 Financing. The Warrants have a three year term that was set to expire October 29, 2012 and have an exercise price per share of $2.255. ~~The~~Subsequently, ~~decrease in~~ the ~~warrant~~Warrants’ ~~derivative~~contractual ~~liability~~life ~~expense~~ was ~~attributable~~extended tofrom ~~the~~an ~~changes~~expiration indate ~~the~~of ~~calculation~~October ~~variables~~29, ~~that~~2012 ~~factor~~until inNovember ~~stock price~~29, ~~risk-free~~2012 ~~rate,~~under ~~volatility~~the same terms and ~~duration~~conditions. The ~~outstanding~~increase ~~for~~in the ~~Warrants,~~warrant asderivative ~~well~~liability asexpense ~~the~~was ~~valuation~~primarily onattributable to the ~~exercise~~increase ofin ~~Warrants during~~ the ~~nine~~stock ~~months~~price ~~ended~~as ~~March~~a ~~31,~~calculation ~~2011~~variable.

The interest income ~~remained~~increased $1 for the ~~same~~period atto $125 for the ~~nine~~three ~~month~~months ~~periods~~ ended ~~March~~September 3130, 2012 ~~and~~from ~~2011~~$4 for the three months ended September 30, ~~respectively~~2011 because of higher average cash balances during the period. The Company had no outstanding long ~~term~~-term debt.

Income tax expense for the ~~nine~~three months ended ~~March~~September 3130, 2012 ~~decreased~~increased $~~780~~846 or 415.69% to $166,~~029~~ 170 from $165,~~809~~324 for the ~~nine~~three months ended ~~March~~September 3130, 2011, due to the ~~decrease~~increase in operating income earned during the period.

Net Income

Net income ~~increased~~decreased by $~~7,082~~78 or 170.34% to $4717,~~949~~773 for the ~~nine~~three months ended ~~March~~September 3130, 2012 from $4017,~~867~~851 for the ~~nine~~three months ended ~~March~~September 3130, 2011, due to the reasons set forth above.

Comprehensive income for the ~~nine~~three months ended ~~March~~September 3130, 2012 ~~increased~~decreased $3,~~907~~580 or 717.73%% to $5417,~~324~~127 from $5020,~~417~~707 for the ~~nine~~three months ended ~~March~~September 3130, 2011, due to the ~~increase~~decrease in ~~net income. The~~ foreign currency translation adjustment ~~decreased~~of $3,~~175~~502 or 33122.26% to ($6646) from $2,~~375~~856 for the ~~nine~~three months ended ~~March~~September 3130, 2012 ~~from~~and $92011,~~550~~ respectively. The foreign currency translation adjustment was primarily driven by currency devaluation of the Chinese RMB versus the US Dollar for the ~~nine~~three months ended ~~March~~September 3130, 2012 compared to currency appreciation for the three months ended September 30, 2011.

Net income attributable to common shareholders ~~increased~~decreased by $~~7,223~~78 or 170.84% to $4717,~~904~~758 for the ~~nine~~three months ended ~~March~~September 3130, 2012 from $4017,~~681~~836 for the ~~nine~~three months ended ~~March~~September 3130, 2011. For the ~~nine~~three months ended ~~March~~September 3130, 2012 weand ~~paid~~2011, ~~$45~~respectively, inwe ~~cash~~paid ~~dividends on preferred stock compared to~~ $~~186~~15 in cash dividends ~~paid~~ on preferred stock ~~for the nine months ended March 31, 2011~~.

Basic and Diluted Income Attributable to Common Shareholders per Share

The Company’s basic net income attributable to common shareholders per share ~~increased~~was $0.0618 ~~or 14.3% to $0.48 from $0.42~~ for the ~~nine~~three months ended ~~March~~September 3130, 2012 and 2011, respectively.

The Company’s diluted net income attributable to common shareholders per share increased $0.0702 or 1713.53% to $0.4717 from $0.4015 for the ~~nine~~three months ended ~~March~~September 3130, 2012 and 2011, respectively. For the three months ended September 30, 2011, the diluted earnings per share calculation deducts the gain from the warrant derivative liability of $2,127 from the net income attributable to common stockholders in the numerator for the diluted earnings per share.

We ~~do not~~ anticipate ~~significant~~ increases in selling, general and administration expenses ~~other~~for ~~than~~the ~~those~~fiscal year ended June 30, 2013 directly attributed to variable costs from increases in sales and ~~public~~operational ~~company administration~~ expenses ~~such as our compliance costs~~ associated with our ~~internal~~purchase ~~controls~~of ~~requirements~~the ofHuajie ~~Sarbanes~~Petroleum ~~Oxley~~assets.

Table of Contents

Reconciliation of GAAP to non-GAAP Financial Measures

The following table contains financial measures that are not calculated in accordance with GAAP. Such measures, which are unaudited and should only be read in conjunction with our financial statements and related notes included elsewhere in this report, are intended to serve as a supplement to the GAAP results. The unaudited non-GAAP information reflects the adjustment to GAAP Net Income Attributable to Common Shareholders on a non-GAAP basis, whereby the effect of the noncash adjustment for each period presented of the change in the fair value of derivatives associated with the October 2009 Warrants is added back to the GAAP Net Income Attributable to Common Shareholders. This non-GAAP adjustment has been used to calculate the non-GAAP basic and diluted earnings per share. The non-GAAP operating results for the quarters presented are not necessarily indicative of results for any future periods, but management believes these non-GAAP financial measures provide useful information to investors for a more accurate picture of the Company’s operations on an ongoing basis.

Longwei Petroleum Investment Holding Limited

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

	For the Nine Months Ended March 31,						For the Three Months Ended March 31,
	For the Three Months Ended September 30,
	2012			2011			~~2012~~		~~2011~~
GAAP Net Income Attributable to Common Shareholders	$	4717,~~949~~758		$	4017,~~867~~836		$	~~14,911~~	$	~~26,346~~
Non-GAAP adjustments:
Add: Non-Cash Charge for the Change in Fair Value of Derivative		~~(602~~575	)		7(2,~~948~~127	)		~~733~~		~~(9,221~~	)
Non-GAAP Net Income Attributable to Common Shareholders (a)	$	4718,~~347~~333		$	4815,~~815~~709		$	~~15,644~~	$	~~17,125~~
GAAP Earnings Per Share:
Basic	$	0.4818		$	0.4218		$	~~0.15~~	$	~~0.26~~
Diluted	$	0.4717		$	0.4015		$	~~0.15~~	$	~~0.26~~
Non-GAAP Earnings Per Share:
Basic	$	0.4718		$	0.5016		$	~~0.16~~	$	~~0.17~~
Diluted	$	0.4718		$	0.4815		$	~~0.15~~	$	~~0.17~~
Weighted Average Common Shares Outstanding:
Basic		100,~~762,002~~961			96100,~~931,079~~752			~~100,766,966~~		~~100,197,482~~
Diluted		101,~~764,016~~814			101,~~508,266~~701			~~101,795,609~~		~~102,136,976~~

(a) Non-GAAP adjustment net of the non-cash expense for the change in the fair value of the warrant derivative liability is added back to the GAAP Net Income Attributable to Common Shareholders in order to calculate the Non-GAAP Net Income Attributable to Common Shareholders and Non-GAAP Earnings Per Share. A reconciliation of these calculations is provided above. (The warrant derivative liability non-cash charge is associated with the issuance of Warrants for the October 2009 Financing. The Warrants ~~have~~expire ~~a three year term expiring~~ on ~~October~~November 29, 2012 at an exercise price of $2.255 per share.)

Liquidity and Capital Resources

General

Cash and cash equivalents totaled $614,~~889~~413 at ~~March~~September 3130, 2012. As of ~~March~~September 3130, 2012, our current assets ~~increased~~decreased $485,~~214~~159 or 332.85% to $~~190~~202,~~764~~838 from $~~142~~207,~~550~~997 at year end June 30, ~~2011,~~2012. The ~~primarily~~Company ~~due~~used toits ~~the~~cash ~~increase~~on-hand inand ~~inventory~~conversion ~~and~~of ~~advances~~working tocapital ~~suppliers~~assets toduring ~~take~~the ~~advantage~~quarter for the payment of ~~price~~$23,710 ~~fluctuations~~for inthe ~~international~~balance ~~crude~~of ~~oil~~the ~~prices~~purchase ~~during~~of the ~~quarter~~Huajie ~~ended~~Petroleum ~~March~~assets ~~31,~~for ~~2012~~a total of $110,646. The Company ~~also~~previously ~~maintained~~maintains a cash deposit of $8786,~~046~~936 for the purchase ~~of the Huajie Petroleum assets~~. Overall, we had aan ~~decrease~~increase in cash flows of $2,~~533~~835 during the ~~nine~~three month period ended ~~March~~September 3130, 2012 resulting from $~~959~~26,584 of cash ~~used~~provided inby operating activities, $223,~~057~~710 of cash used in investing activities for ~~facility~~the ~~and~~closing ~~equipment~~of ~~improvements~~the Huajie asset purchase, $4515 of cash used in financing activities for dividends, and the effect of the exchange rate changes in cash of $~~528~~24.

Our current ratio is approximately 21:1 (current assets to current liabilities) and improves to approximately 42:1 including the deposit, but net of the fair value of the warrant derivative liability at March 31, 2012. Total current assets including the fixed asset purchase deposit as of March 31, 2012 was $277,810. We have no long-term debt as of March 31, 2012. 7

~~Average~~Table ~~age~~ of accounts receivable remained approximately the same at 20 days on total sales, and 81 days on credit sales during the nine month period ended March 31, 2012 compared to the nine month period ended March 31, 2011. (Payments are due upon receipt of the products unless the customer has been pre-approved for payment terms. Approximately 75% of the Company’s sales are cash-payment only upon delivery, and certain large customers are pre-approved for payment terms of up to 90 days. All accounts receivable are paid current.)Contents

~~The~~Our ~~average~~current age of inventory increased to 50 days from 44 days during the nine month period ended March 31, 2012 compared to the nine month period ended March 31, 2011 to account for additional product purchases for on-hand inventory during a period of rising prices to take advantage of our large storage capacity. During this time we also increased our advances to suppliers to lock in pricing and availability based on uncertainty associated with the international crude oil price fluctuations from tensions in the Middle East. The ratio ofis ~~advances to suppliers to inventory increased to~~ approximately ~~1.5~~22:1 ~~from~~(current ~~1.1:1~~assets atto ~~March~~current ~~31,~~liabilities) ~~2012~~at ~~and~~September ~~June~~ 30, ~~2011, and the combined balance in both inventory on-hand and advances to suppliers increased $42,245 or 38~~2012.~~7% to $151,490 from $109,245 during the nine month period.~~ WeWith have used our working capital to increase inventory and product availability based on current changes in market price. We are balancing our working capital to take advantage of pricing opportunities, as well as balancing the ~~funding~~addition ~~required to complete our acqusition~~ of the Huajie Petroleum assets~~. Our~~ ~~accounts~~our ~~receivable,~~total ~~inventory~~asset ~~and~~are ~~advances~~$360,037 toand ~~suppliers~~we ~~balances~~ have ~~now~~no ~~been~~long-term ~~built~~debt ~~back~~as upof toSeptember ~~historical levels last utilized at December 31~~30, ~~2010, prior to operating cash flow being used for the deposit of the Huajie Petroleum assets~~2012.

~~Longwei~~Accounts ~~entered~~receivable ~~into~~turnover adays ~~letter~~increased ~~of intent with Shangxi Jiangtong Chemicals Co., Ltd. (“Jiangtong”) in March 2011~~ to ~~acquire~~approximately ~~the~~20 ~~assets~~days offrom ~~Jiangtong’s~~19 ~~wholly-owned~~days ~~subsidiary~~on ~~Huajie~~total ~~Petroleum Co.~~sales, ~~Ltd.~~and ~~(“Huajie”). The~~increased ~~Company intends~~ to ~~acquire~~90 ~~the~~days ~~assets~~from of76 adays ~~fuel~~on ~~storage~~credit ~~depot~~sales inbetween ~~northern~~the ~~Shanxi~~periods ~~Province~~ended ~~(located~~September ~~in Xingyuan~~30, ~~Shanxi)~~2012 ~~including~~and ~~fuel tanks with a 100~~2011,~~000~~ ~~metric ton storage capacity~~respectively. (Payments ~~The~~are ~~Company~~due ~~has~~upon ~~paid~~receipt ~~a deposit~~ of ~~550~~the ~~million~~products ~~RMB~~unless ~~(approximately USD $87.0 million) toward~~ the ~~full~~customer ~~purchase~~has ~~price~~been ofpre-approved ~~700~~for ~~million~~payment ~~RMB (approximately USD $110~~terms.~~8 million).~~ ~~The~~Approximately ~~assets~~75% ~~are non-operational with no revenue-producing history and include land use rights for 98 acres~~ of ~~land,~~the ~~100,000~~Company’s ~~tonnage~~customers ~~fuel~~are ~~tanks~~cash-payment ~~with~~only ~~accessory~~upon ~~facilities and equipment~~delivery, ~~a special transportation railway line,~~ and acertain ~~3,000-square-meter~~large ~~office~~customers ~~building. The~~are ~~Company~~preapproved ~~engaged a third-party, independent valuation firm~~ for ~~the~~payment ~~appraisal~~terms of ~~the~~up ~~fair market value of the assets~~ to be90 ~~acquired~~days. ~~Longwei will account for the purchase of the proposed assets as an asset purchase.~~ The Company ~~intends~~has totwenty-seven ~~use~~open ~~its~~accounts ~~cash on hand and working capital assets to finance the acquisition. We are working~~ with ~~the~~customers ~~seller~~at ~~and~~September ~~local~~30, ~~officials to finalize the asset transfer~~2012.)

The average age of inventory for the three months ended September 30, 2012 decreased to approximately 42 days as the Company turned on-hand inventory more quickly, but held more inventory through advances to suppliers by locking in petroleum pricing in the prior quarter when prices were at lower levels. This compares to the Company’s average age of inventory for the three months ended September 30, 2011 of approximately 55 days during a time of fluctuating prices for international crude oil. At September 30, 2012 our advances to suppliers were $109,578 compared to $64,522 at September 30, 2011. The Company is continually working to optimize its inventory turnover, which expands sales capacity based on increased inventory movement, and advances to suppliers. In times of anticipated price movements the Company tries to lock-in pricing and adjust inventory on-hand prior to the PRC pricing mechanism adjusting the retail price. Our supplier advance balance with refineries allows us to lock-in pricing and supply so that we can react quickly to purchases based on anticipated movements in the international price of crude oil and the timing of the PRC pricing levels adjustments.

Longwei completed the purchase of the assets of Huajie Petroleum Co., Ltd. (“Huajie”) on September 26, 2012, pursuant to an Asset Purchase Agreement. The Company acquired the assets of Huajie, a fuel storage depot in northern Shanxi Province (located in Xingyuan, Shanxi) including fuel tanks with a 100,000 metric ton storage capacity. The Company has paid RMB 700 million (approximately USD $110.6 million) for the assets. The assets were non-operational with no revenue-producing history and included land use rights for 98 acres of land, 100,000 tonnage fuel tanks with accessory facilities and equipment, a special transportation railway line, and a 3,000-square-meter office building. The Company engaged a third-party, independent valuation firm for the appraisal of the fair market value of the assets acquired, which exceeded the purchase price. Longwei has accounted for the purchase of the assets as an Asset Purchase. The Company used its cash on hand and conversion of working capital assets to finance the acquisition.

The following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:

	(In thousands) Nine Months Ended March 31,
	(In thousands) Three Months Ended September 30,
	2012			2011
Cash at beginning of period	$	911,~~422~~578		$	109,~~125~~422
Net cash (used in) provided by operating activities		~~(959~~26,584	)		53(6,~~265~~626	)
Net cash (used in) provided by investing activities		(223,~~057~~710	)		~~(34,192~~-	)
Net cash (used in) provided by financing activities		(4515	)		~~2,722~~(15	)
Effect of exchange rate changes on cash		~~528~~(24	)		~~433~~131
Cash at end of period	$	614,~~889~~413		$	322,~~363~~912

Cash Flows from Operating Activities

For the ~~nine~~three months ended ~~March~~September 3130, 2012, net cash ~~used~~provided inby operations was $~~959~~26,584 compared to net cash ~~provided~~used byin operations of $536,~~265~~626 for the ~~nine~~three months ended ~~March~~September 3130, 2011. The ~~decrease~~increase of $5433,~~224~~210 or ~~101~~501.82% in net cash provided by operations was primarily due to ~~the~~net ~~increase~~income inof ~~cash~~$17.8 ~~used~~million ~~for~~and ~~working~~the ~~capital assets -~~ $7~~,955~~.5 ~~increase~~million decrease in accounts receivable, ~~$8,631 increase in inventory~~ and ~~$31,106 increase advance to suppliers~~inventory. The combined balance in both inventory on-hand and advances to suppliers increased $4327,~~116~~153 or 3920.8% to $~~151~~157,~~490~~650 at ~~March~~September 3130, 2012 from $~~108~~130,~~374~~497 at ~~March~~September 3130, 2011. ~~The~~Our ~~total~~advances ~~net~~to ~~cash~~suppliers ~~used~~balance inhas ~~financing~~remained ~~the~~at ~~working~~a ~~capital~~similar ~~during~~level ~~the~~to ~~nine~~June ~~months ended March 31~~30, 2012 ~~was $49,903~~. We have used our working capital primarily to increase ~~inventory~~cash ~~and~~for ~~product availability based on current changes in market price. We are balancing our working capital to take advantage of pricing opportunities, as well as balancing~~ the ~~funding~~final ~~required~~payment ~~to complete our acqusition~~ of the Huajie ~~Petroleum~~ assets. ~~(At~~We ~~closing~~continue ~~of the Huajie Petroleum assets, we will require significant working capital for inventory~~ to ~~support~~balance ~~the~~our ~~new facility operations.) Our~~ working capital ~~position is approximately built back up~~ to ~~historical~~take ~~levels~~advantage ~~last~~of ~~utilized~~petroleum atpricing ~~December~~opportunities ~~31,~~with ~~2010,~~our ~~prior to operating cash flow being used for the deposit of the Huajie Petroleum assets~~suppliers.

Based on the ~~nine~~three months ended ~~March~~September 3130, 2012, our inventory product mix was 5850,~~171mt~~481mt (or 1916.2M6M gallons) of product on-hand or 4842.51% of our total storage capacity of 120,000mt valued at $6148,~~302~~072. Our supplier advance balance of $90109,~~188~~578 with refineries allows us to lock-in supply and pricing so that we can react quickly for purchases based on the timing of international crude oil prices fluctuations and the PRC retail pricing level adjustments.

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Cash Flows from Investing Activities

For the ~~nine~~three months ended ~~March~~September 3130, 2012, net cash used in investing activities was $223,~~057~~710 compared to no net cash used in investing activities ~~of $34,192~~ for the ~~nine~~three months ended ~~March~~September 3130, 2011. The ~~decrease~~increase ~~of $32,135 or 94.0%~~ in net cash used in investing activities ~~was~~for ~~primarily~~the ~~due~~three months ended September 30, 2012 was related to the ~~initial~~Huajie ~~deposit~~asset ~~payment~~purchase. We ~~paid~~invested ~~toward~~$89,148 in the purchase ~~price~~and improvement of fixed assets, $21,665 in the ~~Huajie~~purchase ~~Petroleum~~of ~~assets~~land use rights, and correspondingly decreased our deposit as part of the closing purchase price of $32110,~~232~~646 for the Huajie assets.

Cash Flows from Financing Activities

For the ~~nine~~three months ended ~~March~~September 3130, 2012 and 2011, net cash used in financing activities was $4515 for Series A Preferred Stock dividends paid ~~compared to net cash used~~ in ~~financing~~each ~~activities of $186 for the payment of Series A Preferred Stock dividends and the cash provided by the proceeds from the exercise of warrants of $2,908 during the nine months ended March 31, 2011~~quarter. ~~The decrease of $2,767 in net cash provided by financing activities was primarily due to the receipt of proceeds from the exercise of warrants during the nine months ended March 31, 2011.~~

Plan of Operations

As described herein, we ~~anticipate~~have ~~the~~completed ~~completion of~~ the ~~approximately $110.8 million asset~~ purchase of the ~~assets of~~ Huajie ~~Petroleum~~assets asfor ~~soon~~approximately as$110.6 ~~possible~~million. We ~~based~~anticipate onincreasing ~~managing~~ our ~~working~~sales ~~capital. We~~at ~~are~~this ~~currently~~new ~~negotiating~~facility ~~the~~over ~~closing with~~ the ~~seller~~course ~~and~~of ~~regulatory~~fiscal ~~authorities~~year-end 2013. We expect to continue to expand our customer base utilizing our three distribution platforms. Our strategy is to leverage our customer and supplier relationships to develop additional business. We may also look for opportunities to expand our business that we consider accretive to earnings.

We will continue to operate within our business model, which allows us a competitive advantage by utilizing our large storage capacity to adjust inventory levels based on the anticipated movement of industry pricing and acts as a hedge on pricing levels. Utilizing our excess storage capacity allows us flexibility to take advantage of pricing, supply and demand fluctuations within the marketplace. Our inventory on-hand and supplier advance balance with refineries allows us to lock-in supply so that we can react quickly to purchases based on the timing of international crude oil pricing movements and the PRC pricing levels adjustments.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships that are currently material or reasonably likely to be material to our financial position or results of operations.

Critical Accounting Policies and Estimates

The discussion and analysis of the Company’s results of operations and liquidity and capital resources are based on the Company’s consolidated financial statements, which have been prepared in accordance with GAAP. In connection with the preparation of consolidated financial statements, the Company is required to make assumptions and estimates about future events, and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures. The assumptions, estimates and judgments included within these estimates are based on historical experience, current trends and other factors the Company believes to be relevant at the time the consolidated financial statements were prepared. On a regular basis, the accounting policies, assumptions, estimates and judgments are reviewed to ensure that the consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from the assumptions and estimates, and such differences could be material.

The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but are not limited to: (1) inventory costs and reserves; (2) asset impairments (3) and depreciable lives of assets. Future events and their effects cannot be predicted with certainty, and accordingly, accounting estimates require the exercise of judgment. The accounting estimates used in the preparation of the consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. The Company evaluates and updates these assumptions and estimates on an ongoing basis and may employ outside experts to assist with these evaluations. Actual results could differ from the estimates that have been used.

Significant accounting policies are discussed in Note 1, Summary of Significant Accounting Policies, to the accompanying consolidated financial statements. The Company believes the following accounting policies are the most critical to aid in fully understanding and evaluating the Company’s reported financial results, as they require management to make difficult, subjective or complex judgments, and to make estimates about the effect of matters that are inherently uncertain.

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Warrant Derivative Liability

The Company issued warrants in connection with financing instruments. The Company analyzed the accounting treatment and classification of the warrants and summarized the effects and conclusions. The Company accounts for the warrants pursuant to FASB ASC Topic 815.

Impairment analysis for long-lived assets and intangible assets

The Company’s long-lived assets and other assets (consisting of property and equipment and purchased intangible assets) are reviewed for impairment in accordance with the guidance of the FASB Topic ASC 360, “Property, Plant, and Equipment”, and FASB ASC Topic 205 “Presentation of Financial Statements”. The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Through ~~March~~September 3130, 2012, the Company had not experienced impairment losses on its long-lived assets.

Inventories

Inventories consist of finished petroleum products. Inventories are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the year in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the year the impairment or loss occurs. There were no declines in net realizable value of inventory for the three months ~~or nine months~~ ended ~~March~~September 3130, 2012 and 2011.

Management has discussed the development and selection of these critical accounting policies with the Board of Directors and the Board has reviewed the disclosures presented above relating to them.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Interest~~Not ~~Rate Risk~~applicable.

The Company deposits surplus funds with Chinese banks earning daily interest. The Company does not invest in any instruments for trading purposes. The Company’s operations are not sensitive to fluctuations in interest rates. A 10% appreciation or depreciation in interest rates in the three months and nine months each ended March 31, 2012 and 2011 would not have had a material impact on our interest income or interest expense.

Foreign Exchange Risk

While the Company’s reporting currency is the US Dollar, the Company’s consolidated revenues and consolidated costs and expenses are denominated in RMB. Approximately all of the Company’s assets are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as the Company’s revenues and results of operations may be affected by fluctuations in the exchange rate between US Dollars and RMB. If the RMB depreciates against the US Dollar, the value of the Company’s RMB revenues, earnings and assets as expressed in the Company’s US Dollar financial statements will decline. A 10% appreciation or depreciation in foreign exchange rates in the three months and nine months each ended March 31, 2012 and 2011 would not have resulted in a material loss or gain. To date, we have not entered into any foreign exchange forward contracts or similar instruments to attempt to mitigate our exposure to change in foreign currency rates.

Commodity Risk

The risk associated with maintaining large quantities of inventory and amounts on advance to suppliers has the effect of locking in availability and prices the Company pays for fuel well in advance of the time the Company delivers the commodities and establishes customer pricing. A dip in short-term prices in fuel costs may result in declining profits for the Company, which will affect the Company's ability to purchase future petroleum products and make advances to suppliers, since the Company uses its cash to purchase inventory and increase advances to suppliers. The Company manages exposure in the following ways:

The Company’s storage capacity allows management to adjust inventory levels based on the anticipated movement of industry pricing and acts as a hedge on pricing levels. Utilizing our excess storage capacity allows us flexibility to take advantage of pricing, supply and demand fluctuations within the marketplace. The Company’s supplier advance balance with refineries allows us to lock-in supply so that we can react quickly to purchases based on the timing of the PRC pricing levels adjustments.

The PRC pricing level adjustments control the cost basis of finished petroleum products during the year due to petroleum pricing fluctuations in the international markets. The price of finished petroleum products is established by a PRC regulatory body under a formula based on the movement of international prices over a look-back period of 22 working days and reset when the price increases or decrease by 4%. The Company’s average age of inventory during the nine months ended March 31, 2012 was approximately 50 days, which allows us to adjust inventory levels based on the anticipated movement of industry pricing to take advantage of pricing, supply and demand fluctuations within the marketplace. When the price of petroleum is anticipated to decline we reduce our stock on-hand of inventory and then buy additional quantities from refineries based on the next anticipated price movement. Conversely, when prices are anticipated to increase we increase purchases from the refineries to lock-in the lower price before the increase adjustment. Our supplier advance balance with refineries allows us to lock-in supply so that we can react quickly to purchases based on the timing of the PRC pricing levels adjustments. A 10% appreciation or depreciation in commodity prices in the three months and nine months each ended March 31, 2012 and 2011 would not have resulted in a material loss or gain for the Company because of the pricing mechanism in place in the PRC. To date, we have not entered into any commodity forward contracts or similar instruments to attempt to mitigate our exposure to change in commodity prices.

ITEM 4. CONTROLS AND PROCEDURES.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain "disclosure controls and procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of ~~March~~September 3130, 2012, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer, Cai Yongjun, and Chief Financial Officer, Michael Toups, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in our periodic reports is recorded, processed, summarized and reported, within the time periods specified for each report and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the three months ended ~~March~~September 3130, 2012, we have taken additional measures to strengthen our financial controls, which have included training for our accounting staff and allocating financial and human resources to support our internal control structure. We have also contracted with an outside consulting firm to assist the Company in our Sarbanes Oxley (“SOX”) compliance and internal controls. The Company continues its process of SOX compliance, including mapping, testing, analysis and assessment. The Company's efforts are designed to address our internal controls for financial reporting and to strengthen our overall control environment. Our management, including the Chief Executive Officer and Chief Financial Officer, does not expect that disclosure controls or internal controls over financial reporting will prevent all errors, even as the aforementioned remediation measures are implemented and further improved to address all deficiencies. The design of any system of controls is based in part upon certain assumptions about likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

The implementation of our internal controls is on-going, has required substantial expenditures, and could distract our officers and employees from the operation of our business. However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Management assessed the effectiveness of the Company's internal control over financial reporting as of ~~March~~September 3130, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on our assessment, management concluded that, as of ~~March~~September 3130, 2012, the Company's internal control over financial reporting is effective based on those criteria.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS

There have not been any material changes from the Risk Factors disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, ~~2011~~2012, filed with the SEC on September 13, ~~2011~~2012.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sale of Securities

(2) 60,000 shares of restricted common stock to be issued to consultants,

(3) 9,000 shares of restricted common stock to be issued to its directors.

Such securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). The issuance of these shares will be exempted from registration pursuant to Section 4(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

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ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Exhibit No.		Description
31.1		Certification of Chief Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer, Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer, Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101		Financial Statements from the Quarterly Report on Form 10-Q of the Company for the ~~nine month and~~ three month periods ended ~~March~~September 3130, 2012, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheet as of ~~March~~September 3130, 2012 (Unaudited) and June 30, ~~2011~~2012, (ii) the Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income for the ~~Nine~~Three Months Ended ~~March~~September 3130, 2012 and ~~March~~September 3130, 2011, (iii) the Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income for the Three ~~Months~~months ~~Ended~~ended ~~March~~September 3130, 2012 and ~~March~~September 3130, 2011, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~March~~September 3130, 2012 and ~~March~~September 3130, 2011, (iv) the Notes to the Unaudited Condensed Consolidated Financial Statements tagged as blocks of texts
EX-101.INS		XBRL INSTANCE DOCUMENT
EX-101.SCH		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
EX-101.CAL		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
EX-101.DEF		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
EX-101.LAB		XBRL TAXONOMY EXTENSION LABELS LINKBASE
EX-101.PRE		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Principal Executive Officers of Longwei Petroleum Investment Holding Limited
May 10, 2012	By:	/s/ Cai Yongjun
November 13, 2012	By:	/s/ Cai Yongjun
		Cai Yongjun Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Michael Toups
		Michael Toups Chief Financial Officer (Principal Financial and Principal Accounting Officer)
		Michael Toups Chief Financial Officer (Principal Financial and Accounting Officer)

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